I found this article on the wires interesting:
A total of 25 property insurance companies operating in Shanghai signed a Self-Discipline Convention on Motor Insurance recently, agreeing to pay commissions of no more than 8 per cent for third-party insurance premiums and no more than 15 per cent for motor damage insurance and accessory insurance premiums.[...]
Under the convention, it is more cost-efficient for consumers to buy motor insurance policies directly from the property insurers instead of bargaining with the auto sellers.
In recent years, property insurers had to pay an average 30-50 per cent of motor insurance premiums as commissions to auto sellers. Such large amounts of commission might lead to insurance indemnity shortage and harm the interests of insurants.
I don’t know which boggles my poor American head more — the idea that 30-50% commissions are the norm today, or that the insurers will be able to get away with 8% commission for liability cover.
I could comment about insurance being sold through auto dealerships, but that actually makes sense in a market where a large number of auto purchasers conceivably have never owned an auto before. Contrast that to the U.S., where the vast majority of car buyers already have insurance, either by virtue of having previously owned an auto, or because they’re covered by a parent’s/spouse’s policy already.
