Development Of Chinese Insurance Industry-SCP Framework Analysis

After more than 20 years development of Reform and Opening up, Chinese insurance industry achieved remarkable results, at the same time of promoting economic growth, it played a good role of" Social stability". As the full liberalization of Chinese insurance market and further deepening of reform, more and more problems occurred in the development of insurance industry. The analysis of development of Chinese insurance industry based on the SCP framework of the theory of industrial organization is the main content of this paper.The SCP framework of industrial organization that is consist of market structure, market conduct and market performance suits the Chinese insurance industry. In the market structure analysis, the analysis of data proved the Chinese insurance market structure is Oligopoly, has high barriers to market entry and withdrawal, insurance products and services lacks of differentiation, Chinese insurance companies with international competitiveness should be the optimal size of 150 billion US dollars to 200 billion US dollars between. In the analysis of the market conduct, Chinese insurance market that existed improper competition, the lack of development of the premium rate market guidance, a lack of innovation, corporate acquisition is a sound insurance system requirements. In the analysis of the market performance, we know that Chinese insurance companies lack international competitiveness, the lower profitability, investment channels for insurance funds too narrow. This paper presents two aspects of the settlement to promote the development of Chinese insurance industry: First, change the mode of development of Chinese insurance industry, from the original antitrust thinking of the extensive number of enterprises expansion model of development, change in the premise of effective competition to economies of scale, improved economic performance and better participation the international competition. Second, proposed that the insurance industry development policy, including the encouragement of SME development, promote competition; Improve the market entry and withdrawal mechanism; More independent innovation; Pricing of the insurance market gradually transition; The establishment of the insurance industry acquisition criteria; Widen the fund investment channels; Increase education and training of personnel; Improve government monitoring system and so on.