On May 26, 2017, the “Rules for Vehicle Model Identification Coding in the Insurance Industry,” drafted under the responsibility of the Insurance Association of China (hereinafter referred to as the IAC), was included in the first batch of national standard development and revision plans for 2017 issued by the Standardization Administration of China (hereinafter referred to as the SAC), becoming the first recommended national standard project in China's property insurance sector, with plan number 20170506-T-320.

       There is currently a gap in vehicle model standards in China. At present, China's automobile market basically covers about 200,000 major global vehicle models, involving nearly 2,600 automakers and more than 2,500 brands. However, neither the national level nor the relevant industry level has unified naming standards or coding rules, and vehicle model naming is chaotic. This also makes it impossible to unify the same vehicle model across different insurance companies, different underwriting channels (such as traditional manual, online, or telephone underwriting), and claims management, greatly increasing management risk and affecting service quality.

        To promote the sustained and healthy development of the auto insurance business and raise the scientific, refined, and rationalized level of auto insurance risk pricing, the IAC began integrating resources inside and outside the industry in 2014. With the support of industry regulators, the cooperation of insurance institutions, and the collaboration of professional organizations in the automotive industry, it incorporated the opinions and suggestions of numerous experts from the automotive industry, the repair industry, the auto insurance industry, and renowned universities; repeatedly conducted demonstrations and discussions; and refined the draft standard. After deliberation and approval by all members of the Insurance Sub-Technical Committee of the National Technical Committee for Financial Standardization, it decided to apply for the establishment of a national standard in this field and to carry out standardized coding management of vehicle models.

        First, a standardized “vehicle model identity card” will be established for all vehicles in use in China. For example, corresponding codes will be established for each vehicle model across eight categories of key information such as brand, vehicle series, configuration variant, and risk level, providing support for risk identification and risk pricing of various vehicle models and making it convenient for consumers and other relevant departments to query and manage vehicle model-related parameters.

        Second, a standardized vehicle model database (a “grand dictionary” of vehicle models) will be compiled. Vehicle model naming standards and related field information will be presented in database form—for example, covering 12 key elements such as vehicle manufacturer, brand, vehicle series, vehicle group, announced model, engine displacement, approved passenger capacity, approved load capacity, configuration variant, category, series name, risk level, and model name, totaling 23 information fields—and will cover 200,000 vehicle models under more than 2,600 automakers and more than 2,500 brands in China, forming a complete, original, and practical vehicle model standard information system.

        The formulation of China's insurance industry vehicle model coding standard will, first, help lay the technical foundation for refined auto insurance pricing; second, help accelerate the market-oriented reform of auto insurance; third, help protect the legitimate rights and interests of consumers; and fourth, help the insurance industry participate in risk management of the motor vehicle industry. This is the first time China's property insurance industry has carried out standardized coding management of insured subject matter; it is both a key step in advancing refined management of auto insurance and an important measure for the property insurance industry to leverage its professional advantages to innovate social governance.

        The standard is currently being intensively compiled and refined to ensure completion on schedule, on time, and in full according to plan, so that it can be submitted to the SAC as soon as possible.

Source: Insurance Association of China 2016-05-31