The Shanghai Free Trade Zone scheme can help improve the shipping slump

The Shanghai Free Trade Zone officially launched on September 29 has attracted China Pacific Insurance and public Insurance to set up branches, it can be expected that with the promotion and implementation of various support policies, more foreign ship management and manufacturing enterprises will settle in the Shanghai Free Trade Zone, so that the total volume of Shanghai's ship insurance market can be increased.

Industry insiders believe that other domestic property insurance companies must also attach great importance to the impact of the free trade zone on shipping insurance, and will consider the layout of the free trade zone. The support policies issued by the CIRC will provide policy support for China's insurance institutions to carry out overseas network layout, and will also promote the professional operation of domestic shipping insurance.

More foreign-funded shipping enterprises will drive the shipping insurance market

"The downturn in China's shipping industry, which has lasted for nearly two years, is expected to improve after the introduction of the FTA plan." A person in the shipping industry told the Securities Daily reporter that since the fourth quarter of 2011, China's shipping industry has entered the recession range, although the shipping industry boom index has risen in the third quarter of this year, but entrepreneurs' confidence in the future is still insufficient.

Zhang Yanqiang, manager of Marine Department of Zurich Property Insurance (China) Co., LTD., said that shipping insurance mainly includes freight insurance and ship insurance. In terms of freight insurance, the overall Plan for the China (Shanghai) Pilot Free Trade Zone (hereinafter referred to as the "Overall Plan") policies on company registration and tax incentives will directly drive a substantial increase in the cargo throughput of the free trade Zone, thereby increasing the total freight insurance business.

In terms of ship insurance, the policy also proposes to relax the restrictions on foreign ownership of Sino-foreign joint ventures and Sino-foreign cooperation international ship transport enterprises. Chinese-funded companies are allowed to own or control non-five-star flag ships, and first try the coastal piggy-back business of foreign trade import and export containers between domestic coastal ports and the port of Shanghai. The establishment of wholly foreign-owned international ship management enterprises is permitted. "These policies will attract more foreign-funded ship management and manufacturing companies to settle in the Shanghai Free Trade Zone, thereby boosting the total volume of Shanghai's ship insurance market." Zhang Yanqiang said.

According to the Shanghai International Shipping Research Center released yesterday, the third quarter of 2013 China shipping boom report, the third quarter of this year China shipping boom index was 101.71 points, up 15.01 points from the previous quarter, in the micro boom range. This is also since the fourth quarter of 2011, China's shipping industry entered the recession zone, China's shipping climate index *** returned to the boom zone.

At the same time, the Shanghai Free Trade Zone has only released the "general plan", more policy details are still expected, and these policies will have a more profound impact on the development of the shipping industry and shipping insurance industry. According to a survey conducted by Shanghai International Shipping Research Center on "the most expected policy innovation in the Free trade zone by shipping enterprises", trade liberalization and administrative streamlining are the most popular demands of enterprises for the free trade zone policy. Among them, 28.57% of enterprises believe that the free trade zone should make more efforts in trade liberalization, 28.02% of enterprises believe that the free trade zone should be more streamlined, fast and efficient in administrative procedures, 23.08% of shipping enterprises believe that the tax method should be more international. 17.03% of shipping enterprises believe that financial internationalization is the most important reform content of the free trade area. "If the policies expected by these companies can be implemented, it will undoubtedly promote the recovery of the shipping industry and the shipping insurance industry." An industry insider said.

The intensifying competition of property insurance in the free trade zone has forced the reform of insurance enterprises

At the same time, the shipping industry pointed out that although the total size of the shipping insurance market will expand, with the further deepening of the opening of the free trade zone, as well as the optimistic prospects of the development of the free trade zone, the shipping insurance participants will be more and the market competition will be more intense, which will also force domestic insurance institutions to carry out international reform.

The person believes that the layout of China Pacific Insurance in the Shanghai Free Trade Zone is only the first step, other domestic property insurance companies must also attach great importance to the impact of the free trade zone on shipping insurance, will consider in this layout, and originally in shipping insurance has the best advantage of foreign insurance companies will also increase market development efforts, therefore, the intensity of market competition can be imagined. He pointed out that at present, domestic insurance companies have three shortcomings in the development of shipping insurance business: relatively single product structure, lack of experience in shipping insurance underwriting, imperfect international network layout, broad market prospects but the development trend of intensified competition will force domestic insurance companies to improve the level of management and exhibition.

The measures issued by the China Insurance Regulatory Commission to support the construction of the Shanghai Pilot Free Trade Zone propose to support the free trade zone insurance institutions to carry out overseas investment pilot, and actively study the pilot expansion of the scope and proportion of overseas investment by insurance institutions in the free trade zone. An industry expert believes that this may provide policy support for Chinese insurance institutions to carry out overseas network layout, but this work can not be completed in the short term.

In addition, the CIRC also pointed out that it is necessary to support Shanghai to improve the insurance market system and promote the construction of functional insurance institutions such as shipping insurance pricing centers, reinsurance centers and insurance fund utilization centers. Cultivate the ranks of shipping insurance operators and shipping insurance brokers, and develop the Shanghai Shipping Insurance Association. In this regard, Zhang Yanqiang believes that this policy makes the sustainable and healthy development of shipping insurance more hopeful. "Mature insurance markets are all broker markets, relying on their expertise and ability to help policyholders with insurance arrangements. However, at present, the proportion of direct shipping insurance business of Chinese insurance companies is still more than 80%, and the role of brokers is not obvious. If the policy of supporting insurance brokers can be detailed and implemented, it will promote the professional operation of domestic shipping insurance." Zhang Yanqiang said.

In fact, before the establishment of the free trade zone, domestic property insurance companies were optimistic about the future development of shipping insurance and took substantive measures. At present, PICC, China Pacific Insurance, Ping An Property Insurance and Sunshine Property Insurance have set up special shipping centers in Shanghai, and China Pacific Insurance is the first to occupy a space in the Free trade zone to set up a branch.

Shanghai Insurance Regulatory Bureau *** statistics show that in the first eight months of this year, the premium income of PICC Shanghai Branch and PICC Shanghai Shipping Center was 3.2 billion yuan and 1 billion yuan respectively, accounting for 16.24% and 5.39% of the total premium income of Chinese property insurance companies in Shanghai. The premium income of CPIC Shanghai Branch and CPIC Shanghai Shipping Center was 3.9 billion yuan and 500 million yuan respectively, accounting for 19.78% and 2.67% respectively. The premium income of Ping An Property Insurance Shanghai Branch and Ping An Property Insurance Shanghai Shipping Center was 4.5 billion yuan and 200 million yuan respectively, accounting for 22.89% and 1.07% respectively. The premium income of Shanghai Branch of Sunshine Property Insurance and Shanghai Shipping Center of Sunshine Property Insurance was 200 million yuan and 0.01 million yuan respectively, accounting for 1.18% and 0.01% respectively.

"It is not difficult to see from the data that the four insurance companies that have set up a special shipping center in Shanghai have a huge gap in shipping insurance premiums, but the shipping center of Sunshine Property Insurance was set up the latest, and official statistics were only available in August, so the data volume is small." An industry analyst believes that considering the proportion of the shipping center premiums of these companies and the premiums of their Shanghai branch in the whole industry, it can be seen that the current PICC shipping insurance expansion efforts, the premium income of the other three are also larger, and Sunshine property insurance is still in its infancy