After the insurance company receives the premium, it also forms the liability for compensation to the customer. According to the regulations, it is necessary to withdraw the insurance liability reserve in case the customer can pay compensation in case of an accident. This money can't be used casually.
Specific to the income statement of insurance companies, it is more clear. The figure below shows the operating expenses of China Life Insurance.
As can be seen from the table, the withdrawal of insurance liability reserve is the largest expenditure, followed by handling fees, commissions and compensation expenses.
The following figure shows the operating income of China Renshou.
Comparing the above operating expenses table, we can see that the liability reserve accounts for a large proportion of operating income. These liability reserves are actually prepared in advance, accumulated and ready to compensate customers at any time. If an insurance company wants to withdraw such a large amount of liability reserve, the profit can't be as high as you think! !
In addition, the high commission in insurance sales is also a reason for the low profit of insurance companies. As can be seen from the above table, the handling fee and commission payment is also a big expense.
What's more, many people may see that insurance claims are not as high as expected. Yes, but just because the payment is not high now does not mean that it will not be high in the future. It is precisely because of this that it is necessary to withdraw the liability reserve. The liability reserve is actually the customer's money. Even if there is no payment in the future, it will be stored for the customer in the form of cash value, sooner or later it will be the customer's money, not the insurance company's.
For example, I remember that JD. COM's annual revenue was before the world's top 500, but what about profits? Still negative;
For another example, Wal-Mart is the leader of the world's top 500 companies, that is, its revenue ranks first every year, but what about its profit? Far less than technology companies and internet companies like Apple;
That is, revenue is not equal to profit!
Premium is income, and income is profit, which are two different things.
Part of the insurance company's premium is to be consumed as a cost, part of it can only lie on the books, part of it can't be moved for a long time, and only part of it can be invested and managed reasonably, and the direction and proportion of investment are still limited.
But even so, the income of insurance companies is relatively ok!
But why do many people say that their income is low? Because the customer said that the low income refers to the low policy income, which is relative to the overall premium! And insurance companies can't invest in the overall premium! However, it is necessary to use the money earned from investment to make up for the cost consumption and income, and to make up for the loss of income that cannot be generated because it is on the account. Do you think the overall income can be high?
If the insurance company is allowed to invest in the overall premium and then sign a contract that does not protect the principal and the income, the income of the insurance company will rise appropriately!
But also, insurance companies are no longer insurance companies, but fund companies, wealth management companies and securities companies.
So, if you like someone, don't care if he has money. If you like their money, don't care what kind of people they are. You can't have your cake and eat it, because we are all human beings.