Shift from -compensating for losses- to -reducing risks- and explore the creation of a new insurance model

Recently, a new policy titled “Opinions on Strengthening Supervision, Preventing Risks, and Promoting High-Quality Development in the Insurance Industry” was issued. This document emphasizes the importance of understanding the core meaning of high-quality development in insurance. It underscores the need to prioritize service, contributing to the establishment of a robust economic safety net, social security network, and disaster prevention framework. Additionally, it calls for enhancing emergency service mechanisms within insurance, improving risk reduction services, and supporting disaster prevention, mitigation, and relief efforts.

Currently, insurance institutions are striving to advance high-quality service development by closely aligning with precise needs, refining operational services, and embracing technology transformation. This shift aims to ensure the security of economic and social development.

The essence of risk reduction services requires insurance companies to transition from a sales-driven approach to one focused on product services, evolving from traditional economic compensation to risk management and value-added services, while shifting from post-event claims to proactive pre-event prevention.

Taking China Pacific Insurance as an example, the company has not only focused on large disaster claims management in recent years but has also been exploring a new business model that combines “insurance + risk reduction services + technology.” By leveraging technology and services, they are making a move from passive post-event compensation to proactive risk management before and during events.

Their specific initiatives include continually enhancing the use of cutting-edge technologies such as big data, cloud computing, artificial intelligence, and satellite remote sensing in risk reduction services. They are directly addressing technical challenges related to risk prediction and precise identification, intelligent decision-making in risk management, and information sharing on risks. Moreover, they are exploring the establishment of a platform that integrates “insurance + risk reduction services” to build a digital risk management system and a new insurance ecosystem. Furthermore, they are focusing on “risk” as a core element, aiming to innovate services and extend the insurance value chain from the perspective of resolving supply-demand imbalances in the industry.

According to reports, from 2023 to June 2024, China Pacific Insurance invested over 200 million yuan in disaster prevention and reduction initiatives. They deployed around 38,000 personnel dedicated to disaster mitigation efforts, sent out over 18.2 million disaster warning messages, and assessed risks for more than 20,000 corporate clients. Overall, they estimate that their disaster reduction efforts could save over 410 million yuan.