Premiums can be paid and funds stolen can be compensated! What are the expectations for digital RMB linkage insurance

The digital renminbi has currently touched multiple application scenarios in the insurance industry. On May 18th, a reporter from Beijing Business Daily learned that recently, the first digital RMB "return insurance" in Jiangsu Province was implemented. Merchants who purchase this insurance can receive a certain amount of digital RMB insurance compensation according to the policy agreement once they encounter a consumer return. In fact, since the issuance of the first digital RMB policy in the insurance industry in 2020, the forms of linkage between digital RMB and insurance have gradually diversified.

However, currently only a small number of insurance companies have cooperated with banks. So, in what aspects can insurance institutions explore the application scenarios of digital RMB for insurance products and services in the next step, in order to prepare for the arrival of the digital RMB era?

Digital RMB access to insurance and claims' ports'

Digital RMB is a legal tender issued by the People's Bank of China in digital form. It is an important new retail payment infrastructure in the era of digital economy in China. Currently, there are many applications of digital RMB that have been extended to the insurance field.

From the first "offline shopping no reason return loss insurance" project "Wuyou Digital Insurance" recently launched in Jiangsu Province, it can be seen that the agreement signed between PICC Property and Casualty Insurance Zhangjiagang Central Branch and the "Wuyou Digital Procurement" merchant Luyuan Dushang Life Plaza stipulates that both parties' insurance fees and claims will be paid in digital RMB.

Merchants who purchase insurance can enjoy "no reason return loss insurance". Once consumers return goods, they can receive a certain amount of digital RMB insurance compensation according to the policy agreement. In the industry's view, this is a powerful measure to reduce the cost of no reason return services.

Currently, digital RMB payment has "joined hands" with multiple insurance types, including popular welfare insurance products favored by citizens in various regions. For example, in Hebei, Qingdao, and other places, the implementation of digital RMB participation and payment for benefits and social security payment scenarios; In March of this year, the first batch of "digital RMB insurance policies" in the Hengqin Guangdong Macao Deep Cooperation Zone were implemented, and users can purchase Hengqin Life's special insurance products such as accidental injury, accidental medical treatment, and exclusive medical treatment through digital RMB wallets.

Not only has digital RMB payment been integrated into both insurance and claims processing, but exclusive insurance has also emerged for the risk of loss of digital RMB wallets. A few months ago, Bank of Communications Suzhou Branch and Taiping Property and Casualty Insurance Suzhou Branch jointly launched the country's first digital RMB wallet fund loss insurance product, with a premium of 1-5 yuan. During the guarantee period, if personal digital RMB wallet funds are stolen or passwords are stolen, resulting in fund loss, a claim of 1000-5000 yuan can be obtained.

In addition to the above insurance companies, large and medium-sized insurance companies such as China Life Insurance, China Insurance, and China Construction Credit Insurance also have digital RMB services. For example, China Insurance has become the first digital RMB insurance application pilot in Beijing.

Digital RMB has been piloted since October 2020 in Shenzhen, and it has been more than two years now. According to Yu Baicheng, the chief researcher of Houxue Research, in the insurance field, daily businesses such as insurance and claims settlement require currency payments, so some pilot cases of digital RMB have also emerged, laying the foundation for the comprehensive application of digital RMB in the future.

Still waiting for 'ice breaking', application scenarios need to be extended

The development of digital RMB contributes to the Digital transformation of the insurance industry. For example, digital RMB has programmability, and insurance companies can improve their digital marketing capabilities and refined management levels by exploring product innovation in political insurance business, inclusive finance, and other areas.

The digital RMB is the digital form of the RMB and an objective demand for the continuous development of the digital economy. Compared to traditional currencies, the digital RMB has the characteristics of traceability, programmability, low cost, and high security. Therefore, the application of the digital RMB is also conducive to the digitization process of the industry, "Yu Baicheng said.

Embracing digital RMB is not only conducive to the Digital transformation of the insurance industry, but also of great significance to the insurance industry in terms of industry insiders. Among them, it is beneficial to strengthen user connections and expand data dimensions; Beneficial for enriching payment methods, improving user experience, and reducing costs and increasing efficiency; Beneficial for conducting cross-border insurance business; It is conducive to enhancing service capabilities and building an insurance ecosystem.

However, a reporter from Beijing Business Daily found that overall, only a small number of insurance companies have cooperated with banks, mainly conducting pilot projects in the fields of insurance and claims settlement. So, what are the possibilities for innovative linkage between digital renminbi and insurance in the next step, and how can insurance companies help bridge the gap?

This cannot be achieved without the insurance industry paying high attention to the research and application of digital renminbi at a strategic level, providing the strength of the insurance industry for the development of digital renminbi. In the view of industry insiders, insurance companies should accelerate the construction of their own payment account system, strengthen cooperation with banks, build digital RMB service capabilities, actively explore the application scenarios of digital RMB for insurance products and services, and prepare for the arrival of the digital RMB era.

In the insurance field, the unique opportunity brought by digital renminbi is the security insurance of digital wallets. "Yu Baicheng said that the use of digital renminbi involves both soft wallets and hard wallets. Although digital renminbi has high security, there may still be losses such as theft, which provides an opportunity for insurance companies to launch insurance products.

In addition, the programmability of digital RMB provides possibilities for insurance innovation. Yu Baicheng further stated that in the future, for example, by adding smart contracts to digital RMB, when insurance triggers compensation, automatic payment will be made according to the agreed conditions and rules in the insurance to improve the efficiency and experience of insurance compensation.

Programmability will also lead to more application scenarios being implemented. Industry insiders have stated that for example, when users use digital RMB to pay for public transportation, insurance companies can use the programmable features of digital RMB to accurately price factors such as time, location, transportation, and driving routes. In the field of health and elderly care services, through the use of digital renminbi, the advantages of programmable, traceable, and cost free transactions of digital currency are utilized in health management and other services, achieving rapid and direct financial subsidies to hospitals and patients, and improving the efficiency of medical resource investment.

Beijing Business Daily reporter Chen Tingting and Hu Yongxin