A Study Of Bancassurance And China's Choice

In 2006, bancassurance surpassed group insurance and became the 2nd income channel of insurance industry, so bancassurance turned into an academic focus.Usually, domestic scholars high on the bancassurance mode selection and policy advice. But in my opinion, we had better focus more on the institution essence of bancassurance. We even can not agree with each other on some basic conception and question: what's bancassurance? What's bancassurance's development discipline?What's key factors of bancassurance? So the author set out to do some basic study on bancassurance, intending to find out the institution essence and development law of bancassurance and to give some advice on domestic bancassurance's development.At first, the author looks on bancassurance as typical institutional phenomena but not a simple distribution channel or production. Douglas. N. North(1968) claimed that institution is a series of pre-made rules or behavior criterion to restrict the people purchasing the maximum of welfare. Institutions provide a framework in which people affect each other. Institutions establish the relationship of competition and cooperation, with which the society and the economy system are founded. So, the author regards bancassurance as the institution of bancassurance other than distribution channel or production. The author introduces the Functional and Structural Finance (FSF) view to give bancassurance a wider study view. FSF looks financial institution as a dynamic course, so we can study bancassurance's development as a whole and get a relatively complete and impersonal bancassurance institutional category.The author defines a series institution arrangement to respond the consumers'diversified financial functional demand. The institution arrangement itself is a dynamic process, involving the following contents: firstly, understanding and responding the consumers'insurance, financing and trade demand; secondly, the insurance companies and the commercial banks rebuild the value chain to provide productions and services to meet the above functional demand; at last, rebuilt value chain is solid to certain organization.In fact, according to value chain and organization mode, the development of bancassurance can be divided into different phases. The author also pays more attention to the selection of organization mode. In my opinion, the selection is made between market and firm, it also means the selection of organization mode is based on the selection of governance mode. And transaction cost is the key of selection, and that's the key understanding of bancassurance mode selection.As a typical exotic institution, bancassurance is portable, but the institution arrangement's operating style, efficiency and evolvement direction will affected by the domestic financial environment and even culture tradition greatly. And that's why the author selects institution economics tools and views to study domestic bancassurance institution efficiency.The paper consists of six chapters. Here are the main points:Introduction: as the very beginning of the thesis, this part proposes the background and significance of the study of bancassurance. Moreover, the introduction makes a clear definition to the basic connotation. The methodology and the train of thought, i.e. the framework of thought, are specified in this part, which lays the necessary theoretical foundations and makes the academic preparation for the analyses of the subsequent chapters.Chapter One: Bancassurance & Bancassurance Institution. This chapter is the starting point of the thesis. At first, the author reviews the conception of Bancassurance, and makes a new definition which based on the FSF. This dynamic definition involves at least 3 stages: 1. to rebuilt the financial function to meet the consumers'diversified financial demand; 2. the insurance companies and the commercial banks rebuild the value chain to provide productions and services to meet the above functional demand; 3, to rebuilt value chain is solid to certain organization. The following contents are all based on this definition.Chapter Two: the Rebuilt of Financial Function and Value Chain. Based on the analysis on consumers'diversified financial demand, the author finds the demand for insurance, financing and trade are the ultimate reason of bancassurance's arising. In order to meet the consumer's demand, the value chain of insurance industry is rebuilt and divided into two phases: the Pre-Chandlerian Value Chain Phase & the Chandlerian Value Chain Phase.Chapter Three: Selection of Organization and Governing Mode. Institutional analysis is the main research method of this chapter. Transaction cost is the key factor that affects the selection between market and firm. This chapter sets up market governing model and firm governing model to describe the importance of transaction cost. Further more, the author sets up a DEA model to measure the efficiency of bancassurance and make up for the deficit of transaction cost model. In addtion, the author builds a planar specific asset frame to stress the importance of relational financing asset. At last, under the frame of planar specific asset the author predict the future choice of bancassurance: Modularity.Chapter Four: Western Bancassurance Experience. This chapter introduces the bancassurance experience of France, German and U.S.A and induces the success factor of bancassurance product and sales mode.Chapter Five: Rebuilt of Financial Function in China. This chapter verifies the process of rebuilt of financial function in China, and draw the same conclusion that the bancassurance arises from the demand for diversified financial demand. And China is still in the Pre- Chandlerian Value Chain Phase, and the agent organization is the overwhelming organization mode. In addition, how to meet the diversified demand is the most important thing for domestic bancassurance. So the author emphasizes domestic bancassurance product and sales mode.Chapter Six: Future Choice of Bancassurance of China. This chapter makes use of the DEA model which is set up in Chapter three to measure the efficiency of domestic bancassurance and draws the conclusion that the market governing is efficient. So the author assumes that Simple Modularity be a future choice of China. Facing the challenge of modularity, the author put up the future strategy of domestic bank and insurance company.The complexity of bancassurance far exceeds the author's imagination when the author started the study, so the author has to make use of institution economics, econometrics to study bancassurance. Although the author does not extravagantly hope to make any break through in this field, he still want to take a brand new view and draw some new conclusion that can not get from the old view. So the author makes some tries and innovates in the following field: 1. Using a FSF view and institution analysis to describe a relative complete and dynamic conception of bancassurance. This conception not only reveals the static essence of bancassurance but involve the process of evolution of bancassurace.2. Using the transaction cost as the key factor to select between the firm mode and the market mode. The author questions and expands Williamson's specific asset theory and builds a planar specific asset frame to connect transaction cost with the bancassurance organization mode.3. Using the value chain theory to analysis the reason, path and phase of rebuilt of value chain and assume the future selection: modularity.4. Using the Data Envelopment Analysis-DEA to build an efficiency model to measure the real efficiency level of domestic bancassurance market. The conclusion of the model verifies the judgment of bancassurance phase and challenges the popular view of bancassurance's future selection.5. Using the contract theory to explain the essence of bancassurance fee and fee competition and then put forward the solution of the fee competition.