Studies On The Moral Hazard Of Insurance Industry Based On The Mathematical Analysis

With the continuous development of China's insurance industry, there have been various drawbacks in the insurance agency market, such as: covering of the insured risks, intentional fraud insurance and misleading the insured and so on. Targeting to these problems, this paper, with the principal-agent theory based information economics, studies the insurance agent's moral risk problem.Through the analysis of the causes of moral risk in the insurance industry, it is found that one is the asymmetric information and conflicting interests between the insurer and the insurance agent and another is that insurance companies use unreasonable operating methods.This paper discusses how to avoid insurance moral risk from two perspectives. First, the insurance agent and the insured are placed in the principal-agent framework, where the insurer's output function is a nonlinear function, a principal-agent mathematical model is established for symmetric information and asymmetric information for the two sides, and the characteristics of optimal incentive contracts are analyzed. Second, respectively, under the mixed strategy Nash equilibrium model and the dynamic principal-agent model, it is analyzed the insurer's investigating behavior and the insurance agent's moral risk behavior; in addition, the critical investigation cost against the insurer's moral risk, the investigating space and the insurer's violation incomes and irregularities space are discussed; finally, specific measures to guard against moral risks are given.