Study On Patterns Of Sino-foreign Joint Venture Life Insurance Company

Chinese insurance industry has been showing a strong momentum of development since 1980. Its annual growth rate of premium income is close to 30%. The rapid growth of Chinese insurance industry and huge market demand space has attracted a large number of international insurance giants to enter. For the protection of local insurance industry, the form of foreign insurance investment in our country was limited, especially life insurance investment. This lead to special situation that our country has 28 foreign capital life insurance companies of which 27 are the Sino-foreign joint venture companies. Sino-foreign joint venture life insurance companies accounts for nearly half of the current life insurance market in China. But their premium market share has not got any breakthrough throughout. In recent years, senior executive, shareholding, even the capital property change more frequently. Frequent changes in company senior executives and equity mean poor performance of company. It will be helpful to enhance joint venture life insurance companies' competitiveness by studying how to fully display their advantages of both domestic and foreign shareholders.There are many factors influence operating performance of joint venture life insurance companies. This paper mainly focuses on domestic shareholder's industry attributes, and analyze whether the domestic shareholder's industry attributes influence the performance of the joint company. After reviewing related literature, I found there isn't a unified criterion to define Sino-foreign joint venture insurance company either from academic or the legal level. Firstly, this paper gives a more comprehensive and scientific definition on Sino-foreign joint venture insurance company by combining the academic, industry and legal aspects of the existing definitions. Then according to Chinese shareholder attributes of the industry, the paper divides our country's joint life insurance companies into insurance-enterprise joint, insurance-finance joint, insurance-insurance joint three kinds of patterns.The paper takes an empirical analysis on three patterns of joint venture life insurance companies by using the factor analysis model. The empirical results show that insurance-insurance joint venture life insurance companies have the best operating performance, and insurance-enterprise joint insurance companies have the worst operating performance. Then according to the empirical results the paper proposes following suggestions to our country's joint life insurance pattern reform:(1) Based on the form of Sino-foreign joint venture, we could seek diversified structure development in equity. (2) Set more restrictions on entry of insurance-enterprise joint insurance company, and encourage financial corporations like banks to acquire the Chinese shareholders'equity of insurance-enterprise joint companies. (3) Take advantage of insurance-finance joint insurance companies in market sales channel fully. Strengthen the pattern of insurance-bank joint ventures, and turn it into the mainstream pattern of joint ventures. (4) Although the insurance-insurance joint venture life insurance companies perform best, these joint companies are confronted with a congenital trouble—inevitable competing with its Chinese shareholders, which will restrict the long-term development of this pattern of joint insurance companies.