Discussion On The Principal-Agent Problem Of The Non-motor Insurance Claims Disposal

The Insurance Market is made up of three roles: the Insurer, the Insured and theInsurance Agency. When it conies to the disposal of the Non-motor claim cases with theinterposition of the claim adjusters, the Principal-Agents play an important role in theprocess.The relationship between the insurance companies and the agents is one of the typicalrelationships in the Principal-Agent problem .In the discussion of this thesis, on thebasis of classical Principal-Agent Model, we analyse that how the insurance companyshould do to draw up suitable incentive function which is based on the statistical data,and how to decide the parameters of the function under the scenario that the function islinear.Based on the Principal-Agent theory, we studies the Principal-Agent relationship on theinsurance agency market. And then, several typical Principal-Agent problems of theinsurance agencies' market are analyzed: moral hazard, adverse selection andprofit-seeking, etc. In addition, it also discusses the establishment of incentivemechanism and considering the existence of asymmetric information in the insuranceagency market, giving some advices about drawing up an optimal incentive contractsimultaneously.In the last part of the paper, an expectation is given about the foreground of the localInsurance Market, especially focused on the developing of the Principal-AgentIncentive mechanism between the local insurance companies and the claim adjusters.