An Empirical Study On Competitiveness Of Life Insurance Companies In China Based On Factor Analysis

Finance is the core of the modern economy, and the insurance is the pillar industry of the financial circles. Along with the moment's arrival when financial transaction has been open all-sided after our country's entry to WTO by the end of 2006, the foreign insurance companies will inevitably beach in China successively and launch keen competition with the domestic insurance companies. If the whole competitiveness of the life insurance companies in our country can't be improved effectively, some serious problems that can influence the financial stability and even overall economic development may appear. So, it undoubtedly has sizeable academic and practical value that to carry on objective, overall analysis and appraisal to the present competitiveness state of the life insurance companies in our country and make the effective tactics that can promote their competitiveness.Firstly, based on the five competitive forces and supply chain theory of Michael E. Porter, this paper explains the basic conception and characteristic of companies' competitiveness, makes clear the particularity of the life insurance companies' competitiveness and defines its connotation. Furthermore, the author makes reviews and simple comments on the analytical method about the insurance companies' competitiveness by scholars from China and abroad. These have offered theory support for the ensuing chapters. Then, on basis of referencing the present research from domestic and international authoritative organizations and scholars, this paper designs one set of evaluating index system to evaluate life insurance companies' competitiveness. In the part of positive study, this paper looks 20 domestic companies, 3 foreign companies in the world as research objects, and arranges them in an order by adopting factor analysis to confirm the weight of each index, which analyzes the competitiveness state of the life insurance companies of our country in detail. The conclusion indicates that the whole competitiveness of life insurance companies is lower than the foreign companies at large. At the same time, among the domestic companies, the recent founded companies, especially the listed ones, behave better competition advantage than the elders. Then, according to the factor analysis, the author finds out that the abilities of operation innovation, scale strength, development, risks controlling and corporation management are the key factors influencing the competitiveness. Besides, the author analyzes the disparity between the domestic and foreign life insurance companies in these respects in detail. Finally, this paper accordingly puts forward a series of measures and strategies on basis of five competitive force theory with the actual conditions of our insurance companies.The factors and analytic approach to evaluate the competitiveness of life insurance companies are not the best way to picture the competitiveness vividly and directly, but the paper provide a good technological method for the insurance companies in our country to evaluate their own strength, but also benefit themselves to take corresponding countermeasures in order to strengthen their competitiveness. We are sure that the improvement of the competitiveness level of our life insurance companies will finally contribute to the steady development of the financial circles of our country.