Research On Trust Mechanism Of Insurance Transaction And Development Of Insurance

In recent years,trading patterns are changing.In the past,consumers were generally required to pay first and then obtain products and services;Nowadays,consumers can get products and services first,and then pay for them.This is due to the change in trust between traders.The trust in market transactions is formed by a series of institutions and technologies which constrain the behavior of traders.Actually,the dominant trust type in society changes with socioeconomic developments.From agrarian society to industrial society,the dominant trust type in society has changed from personalized to socialized,and at the same time,the form of transaction has also changed from personification to impersonalization.From the perspective of the development of China’s insurance industry in recent years,the insurance industry actively uses new technologies to expand business scope and improve service capabilities.It can be found that more and more insurance services are carried out online,intelligent services are widely used;interaction between insurers and insurance consumers are increased;the risk coverage has been expanding;new forms of risk mitigation are explored such as online mutual aid.These changes have led to thinking about trust in insurance transactions.How will trust adjust as society moves towards digitalization?How will insurance transactions react to these changes?What does trust itself do for insurance transactions?The development of society and technology will eventually lead to institutional changes,and the existing system used to build trust between insurers and insurance consumers will be improved and adjusted in the digital development of society.Before that,it is important to have a comprehensive and systematic understanding of the trust in insurance transactions.Thus,this paper based on the evolution of trust and insurance transactions,combines the multidisciplinary perspectives of economics,sociology and information theory to investigate the following issues:"The meaning of trust in economics","how trust generate","the role of trust in transactions","the trust mechanism of insurance transaction","the Evolution of trust and the development of insurance industry","the influence of trust on insurance purchase".This paper consists of seven chapters,and the specific structural is designd as follows:Chapter 1:Summarize the latest research frontiers and achievements of trust,hold the essence and definition,classification and causes and describe the evolution of trust;summarize the significance of trust in economic activities and summarize the different understanding in sociology and economics;declare the role of trust and the impact of information technology on trust in insurance transactions.Analysing the current research results and shortcomings and put forward the problems and objectives of the study.Chapter 2:Combining the eccence of trust,the difference between trust and credit,the emotional direction of trust,and the rational choice of trust,redefine trust in economics.Distinguish the meaning of data,information,uncertainty and risk,clarify the meaning of relevant terms in this article.Analyze the trust mechanism in modern insurance transactions through the classification of trust(individual and systemic trust)and transaction(personalized and non-personalized transaction),and analyze the importance of law and technology in building trust in insurance transactions.Introduce trust theory,transaction theory,institutional economics theory and information theory as the theoretical basis of this article.Chapter 3:Analyze the relationship among information,trust and transaction,their logical relationship is that information builds trust and trust facilitates transactions.Transaction costs exist because of the information asymmetry and the cost of obtaining information.Trust can promote the market because it’s a link between the two sides of trade which can reduce transaction costs.In fact,it means to build trust relationships in a lower cost way.Asymmetric information will lead to moral hazard and adverse selection in insurance,inform,explain,promise and guarantee is to enable the insurer and the insured to exchange information fully and then build a trust relationship.Based on these analyses,this paper establish a game model to analyze how information builds trust in insurance transactions and the impact of trust on insurance transactions.(1)In the game model with information feedback,analyze how trust changes by different cooperative feedback in each game,and under this change of trust,how will the action strategy be adjusted in the next game.(2)Discuss how collective punishment can build a trust relationship between the two sides of insurance transactions,and compare the effectiveness of punishment with or without information diffusion.(3)Use the information theory to analyze how the development of information technology and the improvement of data collection and processing capabilities can enable insurance companies to grasp the risk level more accurately.Chapter 4:Perspective the origin and development of insurance through the path of trust evolution in human society.The organization mode of social production and life determines the dominant trust type in society.In the period of agricultural civilization,individual trust is the dominant trust type in society as people live in a closed social environment which limited the range of interpersonal communication,and in this stage,people resist risks in small groups formed by blood and geography.In the period of industrial civilization,people live in an open social system,systemic trust is the dominant trust type in society,people spread and exchange risks in the market.Based on the phenomena and characteristics of the society and insurance industry in the digital transformation,find that the digital technology ensures that business processes can be implemented objectively and effectively by eliminating human operation,and information technology improves the efficiency of information transmission,which can build trust.But at the same time,technology brings new capabilities,we need to readjust the fairness between the two sides of the insurance transaction through the institution.Chapter 5:Use the research conclusions and the model built in Chapter 3 for further analysis;discuss the impact mechanism of trust on commercial insurance transactions,put forward research hypotheses and conduct empirical tests.The empirical results show that the interaction and the high attention to financial information can enhance the trust relation,Consumers trust in insurers has significantly increased premium spending on commercial life insurance and commercial health insurance,relevant conclusions have passed the robustness test and endogenous test.The empirical test results are consistent with the theoretical analysis,and the research hypothesis is verified.Chapter 6:As the research conclusion in Chapter 4 show that individual trust and systemic trust should have different effects on insurance participation.Individual trust makes people to resist risks in a private way,while systemic trust makes people use a market-oriented way.In the empirical test,individual trust and systemic trust are distinguished,the empirical results show that systemic trust significantly promoted the premium expenditure of family commercial insurance,but there was no significant impact of individual trust on the premium expenditure of family commercial insurance.In the robustness test,it is also found that systemic trust significantly promotes personal commercial endowment insurance participation,while individual trust has no significant impact on personal commercial endowment insurance participation.Chapter 7:Summarize the research results,put forward development suggestions,and look forward to future research directions.The innovation points of this article are as follows:(1)A comprehensive perspective of trust theory:Although trust has been concerned in economic research in recent years,there is no unified understanding of the classification,causes and nature of trust,and the research on trust in insurance is not comprehensive and indepth.This paper comprehensively and completely explain trust from the perspective of economics,combined with institutional economics,information economics,this paper also describes the evolution of trust along the development of human society and outlines the overall framework of trust.Based on this framework,this paper conducts theoretical and empirical analysis.(2)Expand the research of insurance transaction theory:Trust can reduce transaction costs,which is a widely accepted conclusion.However,the existing research mostly interprets from the perspective of functionalism,and lacks the theoretical exploration of the logical chain.This paper combines transaction theory in institutional economics and information theory,find that the question "why trust can reduce the transaction cost" can be convert to the question "how to bulid trust relationship in a lower cost way".Sufficient information is the key to building a trust relationship,so the information cost actually constitutes the transaction cost.Information can be obtained through personal efforts or provided by government;if the government can provide the infrastructure of trust building,it can reduce the efforts of individuals to obtain information,and reduce transaction costs for individuals.This is the complete logic of trust to reduce transaction costs,which Expand the research of insurance transaction theory.(3)The historical analysis dimension of trust evolution:Explain the development history of insurance through the trust evolution history of human social.The way of risk resistance changes with the transformation of the mainstream trust model of society,the change of risk resistance mode is consistent with the change of trust mode in time.The internal connection is that,the change of trust model reflects the development of society,social change is a whole process,it includes the adjustment of various systems within the society to meet the current social needs.Insurance,as an institutional arrangement to resist risks,will also be adjusted.Under the digital transformation of society,the technology has eliminated a lot of manual operation,which enables business processes to be implemented objectively and effectively.Digital technology has also improved the information acquisition ability,which is beneficial to the establishment of trust relationship.And the technology will endow new capabilities,new institutions are needed to achieve fairness.The marginal contributions of this article include:(1)Redefined trust from the perspective of economics,making it more economic.(2)The types of trust are strictly distinguished,the different impacts of different trust types on insurance transactions are analyzed and then test it,detailed research on the trust of insurance transaction.(3)Interpreting the evolution process of insurance industry from the perspective of trust evolution,which provides a new perspective for the analysis of insurance history.