Asymmetric Information Between Subjects Of China's Insurance Market

The paper studies causes of asymmetric information and two major problems——adverse selection and moral hazards rising from asymmetric information in China'sinsurance market, based on the asymmetric information theory of informationeconomics. It chooses asymmetric information relationships between insurer andother parts (applicant, supervisor, intermediary) in insurance markets as breakthroughpoint from insurer's standpoint, discusses their clashes of interests and equilibriumsolutions to the countermeasure models. At last, according to the specificcircumstances, the paper brings forward feasible solutions to asymmetric informationproblems caused by subjects of China's insurance market, including: tighteninginsurer's internal control, strengthening insurer's external constraint, quickly buildingup better insurance market environments. These suggestions have great realisticmeaning to reduce and avoid adverse impacts from asymmetric information ininsurance market.