Scp Analysis And Structural Optimization Of The Chinese Insurance Market

It can be found from the review of China insurance development in chapter two that on one side, China insurance market structure firstly became competitive then turn oligopoly, on the other side, profitability kept increasing fast all the time. It is the purpose of this paper to find whether the relation between insurance market structure and profitability exists in China insurance. This paper analyzes China insurance′s market structure,market conduct and performance and examines empirically the relation between market structure and performance.Chapter one briefly introduces the purpose and meaning of the study and reviews related theory in this field home and abroad. The purpose of this paper is to examine empirically the relation between market structure and performance. Through reviewing related theory home and abroad, the study progress on insurance market structure and the relation between structure and performance can be seen. Based on existing theory, this paper initially proposes that insurance product differentiation be reflected by the proportion of commission charge to insurance premium.Chapter three analyzes the current condition of China insurance market structure from four aspects: market share; market concentration rate; product differentiation;barrier to entry and exit; It can be got analytically that the current structure condition is highly concentrated.But the concentration rate is tending to decline.Chapter four analyzes the current condition of China insurance market conduct under the background of highly concentrated market structure.It can be seen analytically that China insurance companies usually conduct price competition and this competitive conduct gets to worse off. But non-price competition conduct is minor, such as innovation of product and service and sales model. At the same time, it can be got analytically that such a nicious price conduct is mainly due to highly concentrated market structure.Chapter five analyzes empirically China insurance market performance and the relation between market structure and performance. This paper collected panel data from 14 China insurance companies between 1999 and 2004. Four indices were established to reflect current China insurance market performance. Though stable trend cannot be found, it is obvious that property insurance companies had a better performance than life insurance companies and Chinese companies are better than foreign-capital companies. Through these collected data, five variables were established,which were ROE,as dependent variable, CR,Lasset,RIT and AC, these four variables as independent variable. According to EVIEWS regression result,these four independent variables were all notable under 5% level, but only explained 52.5% variance of dependent variable.Chapter six proposed four measurements to optimize China insurance market structure. They were: (1)Improve management level and reduce operating expenses;(2)Expand asset size and improve industrial organization structure.(3)Release business limitation and strengthen innovation ability;(4)Explore international business and elevate competitive ability.