Core Viewpoint - The insurance industry is experiencing a significant decline in fixed cost rates, which has dropped to approximately 9.0% in 2024, marking five consecutive years of decline. This trend is attributed to the industry's ability to leverage operational efficiencies as premium income grows [2][3][18]. Summary by Sections Fixed Cost Rate Analysis - The fixed cost rate for the property and casualty insurance industry is estimated at 9.0% for 2024, with total original premium income of 1.68 trillion yuan and fixed costs amounting to 151.6 billion yuan [3][15]. - The fixed cost rate has decreased from 12.0% in 2016 to 9.0% in 2024, indicating a downward trend over the years [4][18]. - From 2014 to 2024, the cumulative growth of premiums in the industry was 133%, with an average annual compound growth rate of 8.8%, while fixed costs grew by 77% at an average annual compound growth rate of 5.9% [5][18]. Cost Comparison Among Different Company Sizes - The fixed cost rates for different categories of companies have been calculated, showing a clear distinction between larger and smaller firms. For instance, the top three companies had a fixed cost rate of 7.6% in 2024, down from 9.5% in 2014 [6][23]. - The fixed cost rates for companies ranked 4-8 have also seen a significant decline from 11.1% in 2021 to 8.1% in 2024, while the rates for companies ranked 9-20 were approximately 15.6% in 2024 [24]. - Companies ranked 21-40 maintained a fixed cost rate around 15.6%, while those ranked 41 and below had an average fixed cost rate of about 25.6% [24]. Implications of Fixed Cost Rate Decline - The decline in fixed cost rates is expected to contribute to a continuous decrease in the comprehensive expense ratio within the industry, enhancing overall profitability [5][18]. - The analysis indicates that the fixed cost growth rate is approximately 65% of the premium growth rate, providing a useful reference for companies in budget preparation [5][18]. Methodology for Estimating Fixed Costs - The estimation of fixed costs involved analyzing publicly disclosed data and market surveys to determine variable expense rates across different company sizes, followed by adjustments based on specific operational characteristics [12][13]. - The methodology included calculating fixed costs by subtracting variable expenses from total business and management expenses, leading to a clearer understanding of fixed cost structures across the industry [12][13].