Auto corporations VS insurance companies

Starting at the end of July, the two-month-long confrontation between car dealerships and insurance companies of Guangzhou auto insurance market has finally brought about some beneficial results to the latter.

According to a Chinese newspaper called First Financial Daily, two months ago, in order to prevent the auto insurance frauds and reduce insurance claim payments, forming a united front , the three insurance companies China Life Insurance Company Limited(CPIC), Ping An Insurance (Group) Company Of China Ltd and China Pacific Insurance (Group) Co., Ltd. (CPIC) which together occupy 70％ of Guangzhou auto insurance market sent a announcement to main automobile dealers in Guangzhou, demanding that from August the 2nd once a car wanted to make a claim for having been in danger, the scene of the accident must be surveyed or a testimonial from the policeman charged would be needed. In addition, the announcement also changed the background data for auto dealers. To 4S dealerships the personnel expenses would be given a 50% discount and claim components could get a discount ranges from 95% to 98%.

The core content of this notification is to cancel the long existed ‘double substitute’ (substitute to report a case and to claim) and ‘double exemption’ (lack of surveys from scene of the accident and testimonials from the policeman charged).The moment seven famous brands such as Guangzhou Honda, Guangzhou Toyota, the Nissan, Beijing Hyundai and Shanghai GM received this notification they immediately held a joint meeting and then reached a agreement to stop selling the vehicle insurance products of these three insurance companies in all the dealerships under their brands.

A CBN reporter got some latest new from some related 4S dealerships yesterday that the two camps were both suffering some kind of disintegration. However, the new rules recommended by the three overpowering insurance companies were being implemented to varying degrees.

One manager of a 4S dealership belongs to the seven brands referred above told the CBN reporter as there was not a second joint meeting after the first one, the matter did not develop to an organized Confrontation. Besides, the differentiation also emerged within the camp of the three insurance companies. ‘some of the seven automobile industry companies having participated in the joint meeting now still refuse to sell the three insurance companies’ products. On the other side, the insurance companies make some adjustment later that the standard of discount on personnel expenses and claim components will not be on the same level to all automobile brands and 4S dealerships.’ This manager claimed that it would definitely depend on factors like the business cooperation between the two sides.

Anyway, the insurance companies have got their long wish to finally abolish auto dealerships’ ‘double exemption’’. CBN has confirmed through phone from Ping an Insurance (Group) Company of China Ltd and China Pacific Insurance (Group) Co., Ltd. (CPIC) that the former has formally canceled ‘double substitute’ and ‘double exemption’ while the latter can now enjoy the chance of ‘double exemption’ once a year on car caustic danger program only.

Some 4S dealerships claim two months after the implementation of new rules, their profits have been influenced already. ‘The costs of components are increasing while the income on personnel expenses is declining. Besides, as to customer service, the abolition of the original ‘double substitute and double exemption’ has some negative impact to 4S dealerships.’

Auto insurance premium takes a pivotal role in insurance companies while auto insurance payment totally the opposite directly for the high rate of insurance payment. Nearly 10％ of insurance claims are artificial due to insiders’ conservative estimate.

One inside man from one of the three insurance companies have informed CBN that according to the internal statistics, the rate of false reporting has decreased by 10％ during the two months after the implementation of the new provisions. Moreover, strict detection on drunk driving in recent two months has brought about a reduction of insurance payment by a rate of 10％-20％. The profits have been enhanced by 10％. ‘Comprehensively, the new rules are effective.’ The man has said so.（Translator: Yalong/Jessie）

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