Spread: the premium we pay to the insurance company is equivalent to paying the deposit in advance, and the insurance company has to pay some "interest" for it. In order to earn back this interest, insurance companies have to invest to make more money. If the money earned exceeds "interest", it is called spread.
If it is short-term insurance, the spread will not have a great impact. However, life insurance companies have been compounding interest for decades, and even the 0.5% spread difference is amazing.
Death difference: this is easy to understand. The insurance company has to give the insured a certain amount of money every year, but the insurance company will have a predetermined amount of compensation every year. For example, it is expected that 10 cases will be paid next year, but only 7 cases will actually be paid, and 3 cases with less occurrence are differential payment for death.
Cost difference: insurance companies will incur various expenses in the course of operation, such as office space, employee salaries, marketing and promotion. If these costs incurred in the actual operation of the company are less than the predetermined amount, it will generate cost difference income.
The above three spreads, death interest and handling fee interest add up to the main profit of an insurance company, and it is these three spreads that make us make money.
However, not every company is likely to make a lot of money, especially the insurance companies established in recent years, all seize the market with cost-effective products, and their ability to make money depends on the following aspects:
(1) Investment capacity. This depends on the configuration of the asset management team of the insurance company. The stronger the asset management team, the stronger the investment ability.
(2) sales ability. Sales channels are divided into online and offline channels, but at present, the main source of premiums is offline channels, and the traditional life insurance companies with large teams of agents are very strong.
(3) Pricing ability. Pricing ability and sales ability are inseparable. The stronger the sales ability, the more expensive the pricing can be, which is also part of the profit margin.
This is enough to explain how more insurance companies make money. For more specific explanations, please click the following link, and 100 "Xueba said insurance" will answer you.
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