Ministry of Railways wants to introduce mandatory railway carrier liability insurance

The Ministry of Railways recently intends to introduce compulsory railway carrier liability insurance. Changan Liability Insurance Co., Ltd. (hereinafter referred to as Changan Liability Insurance), which is expected to exclusively contract this project, has surfaced. The company is also the only professional liability insurance company in China.

The recent series of EMU accidents and the Shanghai subway accident have aroused great concern from the society, and large-scale accident compensation has become a major burden. According to the survey, in 2010, the premium for accidental injury insurance for railways reached 2.69 billion yuan. This scale is already equivalent to the size of a premium insurance company's premium. Some people in the industry believe that China’s dense rail transport network makes it necessary for the railway carrier’s compulsory liability insurance.

The insurance coverage of the current railway accidental injury insurance is only 20,000 yuan, and the insurance premiums paid by passengers at different seat classes are different, but the insurance coverage is the same. This phenomenon is in urgent need of change. According to the principle of "who benefits from whom," it should be the railway department that purchases insurance to transfer the transportation risks it bears. After passengers purchase tickets, the railway transportation department has an obligation to protect the personal and property safety of passengers.

Experts said that railway operators should insure insurance companies, separate government and enterprises, and increase insurance efficiency. The reasonable rate is determined by the actuarial department, the current year's rate is determined based on the rate of occurrence of the railway accident in the previous year, the rate is adjusted annually, and a reasonable amount of insurance is established. The CIRC conducts audits in accordance with the principle of “not winning without losses” in the compulsory insurance business, which can be modified in the form of a hearing. In addition, passengers should also be encouraged to insure against accidental injury to passengers, and the insurance coverage should be changed to voluntary insurance. This must be combined with mandatory railway carrier liability insurance to jointly protect passengers' personal and property safety.

Mr. Chen, the person in charge of the listing of Chang'an Liability Insurance, confirmed that the current actuarial insurance program for mandatory railway carrier liability has been submitted. When the China Insurance Regulatory Commission has approved it, it is still unknown. This project is the exclusive negotiation of the company with the Ministry of Railways.

The responsible person of Chang'an Liability Insurance and Underwriter Beijing Century Hualong Investment Management Consulting Co., Ltd. revealed that the annual insurance amount of the Ministry of Railways may reach 1.8 to 2 billion yuan. "The benefits are being discussed."

Chang'an Liability Insurance was led by the Ministry of Housing and Urban-Rural Development, jointly supported by 10 ministries, Changan Security and other large national business units were established as the main sponsors. It was established in November 2007 and is headquartered in Beijing. Its business scope is characterized by liability insurance, in addition to general property insurance, credit insurance, and guarantee insurance.

Changan liability insurance premium income in 2010 1.67 billion yuan, a total profit of 46.95 million yuan, the overall cost rate of 98.56%. In 2011, the estimated earnings per share is 0.07 yuan, and the estimated total profit is about 90 million yuan. Changan Liability Insurance is also preparing to obtain a life insurance license in 2012-2013, as well as a full investment qualification license. We plan to complete the listing around 2013 and build a domestic leading and world-class financial insurance group.