A Comparative Study On The Profit Efficiency Of Sino - US Insurance Companies

China’s life insurance premium ranked fourth in the world in 2014, but there is a big gap between China and developed countries and regions with regard to insurers’ international competitiveness. This paper makes a comparative study of life insurers’ profit efficiency between China and the United States from 2009 to 2013 by using SFA. The empirical results show that Chinese life insurers’ five-year average profit efficiency is 0.6441, which is significantly lower than the United States. But the Chinese life insurers have maintained a good momentum of growth from 2009. As for the US, small life insurers are much more easily influenced by the financial crisis, but from 2012 onwards, average profit efficiency of 20 life insurers rises above 0.9. With regard to the factors, the expansion of market share will significantly improve China 20 life insurers’ profit efficiency, while GDP growth rate, inflation rate and growth rate of M2 don’t have obvious impacts on the profit efficiency. And for the United States, increasing in GDP growth, market share and growth rate of M2 will promote 20 US life insurers’ profit efficiency, while rising inflation rate will reduce its profit efficiency. To promote the international competitiveness, this paper argues that we should optimize the market structure of life insurance industry, take control of operating expenses of life insurers and increase the category of market players.