Regional Development Of The Life Insurance Industry In China

Nowadays, there exist huge divergences between the regional developments of Insurance industry in China, which would not conducive to form an orderly competitive configuration in insurance market, optimize allocation of insurance resources, and improve the mode of insurance growth. As a result of such discrepancy, it will impede the advancement of insurance industry in whole eventually. With the might progress of economy and society in China, government has been enacted a series of policies to stimulate the regional development coordinately owing to its emphasis on regional differences and the effects caused by them. For example, in the"Eleventh Five-Year Planning", government ruled out to implement coordinate development between regions. In the documents of observations on how to improve insurance industry, the state council put forward the requirement of coordinate the regional development in insurance industry as well. Therefore, it is of great significance to study related issues on regional development of life insurance industry in China both in theory and practice.The motif of this paper lies on theories and methods to further the coordinate development of life insurance industry in China. In this paper, it systematically sorts out basic theories about the theme in the very beginning, and then sets forth all the factors, that would influence the development of life insurance in the aspects of economy, society, culture and policy, under the guidance of the theory of effective demand. After this, we measure the level of divergences between regional development of life insurance by the Method of Theil Coefficient, and then, we uses the Method of Multiple regression measurement to analyze factors which would influence the demand of life insurance. Furthermore, we redraw regions of life insurance markets in China, and build econometric models to examine the trends of variation in regional discrepancies of life insurance by values of Theil Coefficient andβ-Convergence Coefficient. Besides, we analyze the relationship between regional developments of life insurance and regional developments of economy, especially the level of coordination between them. At last, we propose plots on how to coordinate the regional development of life insurance industry.In this paper, we summarize some propositions through theoretical and empirical research as follows:Firstly, divergences between regional developments of life insurance mainly incarnate on two indexes, premiums and insurance density, due to current situation of regional developments in life insurance, rather than insurance depth index. In view of this, we index the Theil Coefficient in order to exclude effectuations of the level of economic development. Hence, we prove that the regional developments of life insurance is in the situation of disequilibrium as whole. It is unwise to divide regions of life insurance according to economic regions, so redrawing such regions is of great necessary.Secondly, we can divide regions of life insurance industry in China into four classes by the method of Factor Analysis and Clustering. The first class concludes provinces such as Beijing, Tianjin, Shanghai; the second class concludes provinces such as Hebei, Shanxi, Niaoning, Heilingjiang, Jiangsu, Zhejiang, Shandong, Guangdong, Fujian, Xinjiang; the third class concludes provinces such as Chongqing, Jilin, Jiangxi, Shanxi, Neimenggu, Gansu, Ningxia, Anhui, Henan, Hubei, Hunan, Sichuan, Hainan; the forth class concludes provinces such as Guangxi, Guizhou, Yunnan, Qinghai, Xizang.Thirdly, since the year of 2001, discrepancies between regional developments of life insurance industry in China are gradually converged based on the empirical research under the method of Theil Coefficient andβ-Convergence Coefficient.Fourthly, on one side, according to the model we build to certificate the relation between regional life insurance and regional economy, we prove that development of regional life insurance do devote to promote the advancement of regional economy. On the other side, the coordination of regional life insurance and regional economy is under a poor condition although such condition has been improved gradually recent years, which also explains that discrepancy between regional developments of life insurance is to be converged.Fifthly, the way to stimulate coordinate regional development of life insurance not only lies in the basis of market regulation, but also the guidance of macro-regulation by government. On one hand, we should foster regional growth pole to spur coordinate development by diffusion effect, we should accelerate innovation in life insurance industry to realize leap-forward development in life insurance. On the other hand, we should enhance system of supervisory on regional life insurance, provide prerequisite policies to support regions that level of development is been lay behind, and try to perfect the environment regional life insurance relies on.