The financial industry is the core of modern economy, while the insurance industry is an important part of the financial industry. In recent years, with the sustained, rapid and sound development of the insurance industry, the premium incomes of the insurance industry in China have reached RMB 1.55 trillion, 5900 times over the figure in 1980, and the total assets of insurance companies have amounted to RMB 7.35 trillion by the end of 2012. The insurance industry plays an increasingly significant role in safeguarding the social stability and promoting the economic development.
As the reforming of insurance system accelerates, insurance market is further opened up, the insurance industry sees continuous emergence of more new business, new products, new service areas and new ways of management, acceleration and expansion of the transaction increases continuously between domestic and foreign insurance companies as well as between the insurance industry and other financial industries. The market competition and interdependence rapidly increase, posing greater difficulty for data exchange and data management.
Meanwhile, the prosperity and development of the insurance market bring higher requirements of consumers for the quality of insurance services. Under such circumstances, it is the urgent need for China''s insurance industry to build up a whole set of international level standards for insurance technologies, products, business, management and service, and to gain advantages in the global competition, so as to reduce transaction costs, decrease operational risks, improve market efficiency, and enhance information transparency. At the same time, adopting and developing first-class insurance industry standards is also the only way to enhance the competitiveness and overall strength of insurance companies and establish first-class insurance enterprises. Therefore, the article mainly from the aspects of the development and trend of insurance standardization discusses new tasks and explorations of the insurance industry standardization.
1. Progress of Insurance Industry Standardization
The insurance industry of China started the standardization work late, but at a higher level and a fairly good pace. Since the foundation of China Insurance Industry Standardization Technology Committee (CIISTC for short) in 2005, under the correct leadership of China Insurance Regulatory Commission (CIRC), with the great support and active participation of various insurance agencies, the whole industry carefully studies the current situation and development trends of the insurance industry, fully draws lessons from domestic and international standardization practice, follows the principle of "overall planning, stressing on key points, prioritizing urgently needed standards ", does a lot of fundamental and creative work with clear objectives set, key areas emphasized and the construction steadily advanced, and primarily develops a set of data standards system which meets the developmental needs of China''s insurance industry.
By the end of 2012, 18 insurance industry standards have been drafted by CIISTC and officially released by CIRC. Among them, Insurance Terminology is the first financial industry standard developed by the insurance industry. Guide for Insurance Standardization is the standard for standards development. Insurance Basic Data Meta-directory, Insurance Basic Data Model, Insurance Business Code Set, Coding Specification of Insurance Industry Organization Code and Assessment Index System Specification of Insurance Information Security Risk, together serve as the cornerstone for the insurance informatization standards system framework, and as an important basis for regulating the industry informatization construction and information security management.
Data Exchange Specification of Life Insurance, Bank Insurance Business, Data Exchange Specification of Property Insurance, Bank Insurance Business, Reinsurance Data Exchange Specification, Motor Vehicle Insurance Data Exchange Specification, Catastrophe Insurance Data Acquisition Specification and Health Insurance Data Exchange Specification provide important information exchange standards for the insurance industry, playing an important role for the data exchange of the insurance industry.
Indicator System Specification of Statistical Analysis in Insurance Companies, Property Insurance Document, Life Insurance Document, Insurance Basic Specification of IT Service Management and Counter Service Specification of Life Insurance Companies are regarded as crucial exploration on the development of service standards for insurance business, playing a positive role in specifying relevant business management.
The development of Five-Year Plan for China''s Insurance Industry Standardization (2007-2011) lays a foundation for constructing the insurance standardization from scratch and explorative establishment of the standardization system. The development of The 12th Five-Year Plan for China''s Insurance Industry Standardization provides useful weapon for standardization to solve development problems, prevent and mitigate risks, and standardize market development, also marking further improvement of the insurance standardization system.
In the period of the "11th Five-Year Plan" (2006-2010), promoted by CIRC and CIISTC, various insurance organizations attached great importance to the standardization work with unprecedented enthusiasm. By the end of 2011, altogether 65 domestic insurance companies and 27 foreign insurance companies joined CIISTC. Insurance organizations not only actively participate in and assume industry standardization projects to support CIISTC for joint industrial forces in standardization, but also continue standardization exploration and practice at the enterprise level.
Special workgroups or committees for standardization have been built in dozens of insurance organizations, such as PICC Group, China Life Group, China Reinsurance Group, Ping An Group, China Export & Credit Insurance Corporation, etc., to effectively integrate standardization resources in the internal group or company, enhance standardization efforts and guarantee the standardization work.
In addition, CIISTC has had wide exchanges and cooperation with many domestic and international industry organizations, standardization organizations and insurance organizations to absorb advanced experience and results, effectively promoting the development of insurance industry standardization.
CIISTC not only maintains close communication and cooperation with SAC and CFSTC, and participates in the relevant work organized by SAC and CFSTC, but also held joint meetings with CIRC Solvency Standards Committee and China Association of Actuaries. At the same time, it maintains contacts and exchanges with international organizations including ACORD, American Insurance Service Office, Geneva Association, German Insurance Association and the French Insurance Industry Federation etc. For instance, CIISTC organized the insurance industry to participate in the ACORD plenaries held in the U.S. and Singapore in 2011 and 2013 respectively. It also organizes standards project teams to investigate and study foreign insurance companies, communicate standardization experience and results, broaden insights and thoughts, and improve the level and capability of domestic insurance standards development.
Obviously, the insurance industry standardization has gained remarkable periodical results in the past eight years, and played a positive role in promoting industry informatization and standardizing business management, contributing positively to the normalized, sustainable, healthy and rapid development of the insurance industry. The above achievements of CIISTC have been reached thanks to the leadership and attention of CIRC, strong support and guide of SAC and CFSTC, active participation of every member, dedication of all project team members and support of the whole industry.
The "12th Five-Year Plan" period (2011-2015) is a critical period for the reform and development of China''s insurance industry. CIRC Chairman Xiang Junbo stresses that in the future the development and supervision of insurance industry should essentially follow the guidance of the Scientific Outlook on Development and focus on promoting the role of the insurance industry in the five major tasks. Concretely, the industry should play a part in improving modern financial system, social security system, agricultural security system, and disaster prevention and mitigation system, to contribute to the improvement of the social management system. As a scientific management tool, standardization is required to further meet and support the development needs of the industry and play its role more fully and effectively.
2. Trend of Insurance Standardization Development
The development of the insurance industry has put forward new requirements for insurance standardization. To create a new situation for the insurance standardization, it is essential to strategically match the industry development with the industry standardization, and grasp the developmental direction for the insurance standardization with Chinese characteristics.
First of all, the standardization work must adhere to serving the reforming and development of insurance industry. China''s insurance industry is still in the early stage of development. Problems caused by the extensive development of "high-input, high-cost, high-consumption, low efficiency" have not been thoroughly solved. Besides, accumulated industry problems influencing the industry image and consumer rights protection such as the sales misleading and difficult settlement of claims due to the rapid development should be vigorously and comprehensively solved.
In addition, the mixed operation trend of China''s finance and insurance industries intensifies the increasingly close relationship between insurance standards and financial industry standards. Therefore, the insurance industry standardization should focus on the overall situation of changing the development mode of insurance industry, consumer rights protection and the development of modern financial system, to further improve the theoretical research and system construction of standardization and to practically prove the effective value and benefits of standardization in the industrial reform and development.
For instance, close attention may be paid to standards for the old-age security system in the field of medicine and health, property insurance standards related to motor vehicles and various other standards, agricultural standards for farming and aquaculture, and disaster standards unified with relevant domestic standards for earthquakes, typhoons, floods, etc. Insurance standards should not only be connected with the financial system standards, social security system standards, safety risk standards and other types of standards, but also may tackle hot and difficult industry problems for the building of a comprehensive standardization system.
Second, the standardization work must focus on serving to prevent and defuse insurance risks. The prevention and diffusion of risks is the eternal theme of insurance. A wider range of insurance risks are observed everywhere, including solvency shortage, asset management risk, moral risk, operational risk and so on. To prevent and defuse risks, the most important thing is to perfect the mechanisms, including the perfection of the system and standards and the establishment of relevant standards. Especially in the aspects of warning risk and prevention, the unified standards formed by the whole industry are helpful to identify risks and take preventive measures, to give play to the role of the insurance industry in promoting national financial stability and also deepening the insurance standardization construction from the perspective of risk prevention.
Third, the standardization work must serve to enhance the insurance service level. With the growing knowledge of people for insurance and the increasing strength of the insurance industry, insurance has penetrated into all levels of the national economy and social life, so insurance services are also reflected in all aspects. Therefore, improving the level of insurance services and enhancing the ability of insurance services is an important means to enhance the industry image and strength, and also an important manifestation of serving the economic construction and promoting people''s livelihood.
The standardization of insurance services is the base for wider public acceptance of insurance services. The insurance service specification and standardization is functioning in the specific links of consumer services and interests protection, such as the insurance services regarding "agriculture, rural areas and farmers", participation in the construction of national multi-level medical security system and pension security system as well as the popularization of honest sales, quick settlement of claims, and product terms. To intensify the development and revision of industry service standards is the new requirement and development trend of the insurance standardization work.
At present, CIISTC has been carrying out the development of standards for complaints management of insurance organizations.
Fourth, the standardization work must effectively serve the insurance informatization construction. The insurance industry is information-intensive, essentially needing the support of information technology in all the operational and management activities. The standardization in the informatization construction process reflects the level, efficiency and quality of informatization services to some degree.
The standardization work is involved in the establishment of the information exchange and common service platform of the insurance industry, as well as the IT service management, information security, system construction and data applications, and even the construction of emerging e-commerce channels in insurance enterprises. With regard to this, the insurance standardization has attached great importance to the establishment of data standard system in its development. In the future, the development and revision of standards needs to further grasp the trend of informatization applications tightly and effectively support the changes in the insurance business.
Fifth, the standardization work is both process and result.
The standardization work as a purposeful and organized activity constitutes a series of activities from the development of standards to publicity and practice of standards, revision of standards after collecting feedback information, implementation of standards, etc. Only following the spiral ascending developmental cycle will the level of standardization be improved. Therefore, standardization is both process and result. To make the best of standards, attention must be paid to the promotion, implementation, and supervision of standards, which is also the key stance of insurance standardization.
In a word, the domestic insurance standards system established by the insurance industry at its current development stage needs to be improved, and it is the top priority for the insurance standardization work to perfect this system. With the system construction only as the first step, the purpose of standardization is to improve the operation and management level of the industry and to enhance the consumers’ satisfaction for insurance by the means of standards, so as to gradually advance the initial stage of insurance standards into the intermediate and advanced stages. Therefore, insurance standardization will emphasize system optimization and improvement, strengthen quality control and supervision application, and make itself an effective tool to promote the development of the insurance industry.
(From China Standardization May/June 2013)