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recently, some investors reported that the "first month 0 yuan" insurance that was stopped by the regulator has made a comeback in the form of "first month 0.6 yuan" and free insurance. many investors were misled and bought insurance products that far exceeded their expected amount.

the above operation is generally referred to as "magic cube business" in the industry. it is a marketing method commonly used on the internet. that is, insurance companies attract customers by giving away free insurance or offering insurance with low premiums, low coverage and high deductibles, and then guide them to "upgrade" their insurance.

it is undeniable that compared with traditional insurance marketing, low-price or free insurance in the first period is one of the marketing methods with the highest conversion rate. it is equivalent to a "hook" or "lead" that can quickly select the target group and then reach them accurately and frequently.the possible problem of induced sales behind the "magic cube business" cannot be ignored. many years ago, the former hainan banking and insurance regulatory bureau issued a document pointing out that merchants use internet platforms, apps or qr codes and other online scenarios to promote insurance through methods such as "1 yuan insurance", "1 yuan for the first month", "free collection" and "lottery draw", giving consumers the illusion that they can get insurance benefits by paying a very small amount of money; the automatic deduction prompt is not prominent when purchasing, and consumers feel abrupt when they automatically renew their insurance. in essence, this marketing method only spreads the premium to the later stage, and consumers do not really enjoy the discount. the merchants did not inform consumers of this situation during the sale, which infringed on consumers' right to know and right to choose independently, and easily led to consumer disputes or complaints.

in order to increase business volume and make profits, insurance companies continue to innovate ways to encourage or even induce consumers to buy insurance.from the early days of insurance agents visiting strangers and promoting products among relatives and friends, to today’s telemarketing, online marketing, and even various “illegal” inducement marketing, the result is insufficient consumer demand for insurance, deceptive marketing, regulatory penalties, consumer distrust, further insufficient demand, and upgraded deceptive marketing… a vicious cycle has formed.

because of this, regulatory authorities have taken action on many occasions to rectify the chaos in the "magic cube business".

in 2020, the former china banking and insurance regulatory commission notified and punished a number of insurance companies and brokerage institutions for deceiving policyholders with "0 yuan for the first month" and "1 yuan for the first month". in november 2023, the financial regulatory administration issued the "notice on further improving the short-term health insurance business" and the "reminder on the risks of short-term health insurance products", adding new requirements for internet sales platforms, requiring all insurance companies to fulfill their principal responsibilities and strengthen the management of third-party sales channels. at the same time, insurance companies are reminded that they should not use "premiums as low as (minimum) x yuan", "starting from x yuan per month", "guarantee as high as (maximum))x million", as well as words such as "as low as (the lowest)", "starting from", and "as high as (the highest)" for improper promotion.

why does the "magic cube business" reappear despite the repeated warnings from the regulatory authorities? the root cause is profit-driven. insurance companies are sales-oriented and try every means to acquire customers. they acquire customers through small-amount free insurance and then conduct follow-up development to obtain higher value. this is especially true for small and medium-sized insurance companies, which are poor in customer accumulation and user stickiness and are more likely to take a wrong approach.

in fact, low-price marketing is not completely undesirable. the premise for its virtuous cycle is that consumers truly experience the company's insurance products and services. as one consumer said, "even if i admit that low prices are indeed effective, can insurance companies keep up with long-term compensation capabilities and service quality?"

the advantage of internet insurance is that it is convenient and fast. going against this original intention, relying solely on marketing gimmicks to attract traffic and blindly pursuing sales scale is obviously short-sighted and non-compliant.on the one hand, which means that some insurance companies still have problems with extensive business management and inadequate performance of their principal responsibilities;on the other hand, which also means that the regulatory penalties are not strong enough.

in this regard,insurance companies should change their business philosophy, enhance their awareness of principal responsibility, and strike a balance between short-term and long-term interests.. on the product side, product pricing should be scientific and reasonable, and the insurance premium rates for each period should be determined strictly based on pricing data; on the sales side, it is necessary to strengthen the training and management of sales personnel to ensure that their sales behavior is legal and compliant. taking the upgrade of relevant insurance products as an example, the customer's written consent is required, and the customer must be given ample time to decide whether to "upgrade". at the same time, the pros and cons, risks and costs of insurance products must be clearly introduced to consumers so that consumers can make wise decisions.

in addition, regulatory authorities should also further regulate and manage behaviors such as free insurance gifts, increase supervision and punishment of related companies, require related companies to further conduct self-inspection and rectification, and strictly hold internal accountability, so as to strive to eliminate the chaos of "magic cube business" from the source.

for consumers, it is undoubtedly the most important thing to keep their eyes open. consumers should realize that insurance products are complex financial products, and should understand the payment amount and term of insurance products in detail, and should not blindly purchase insurance.