A Game Analysis Of Automobile Insurance Moral Hazard

The increase of the development and amount of the auto mobile industry promotes the development of motor vehicle insurance business. Motor vehicle insurance has become the largest auto insurance in property insurance business in China which has become a "barometer" of property insurance and takes possession of more than 70% business. However, a problem which cannot be ignored, if not seriously, it will become a major problem in property insurance.In this paper, from the theoretical knowledge of motor vehicle insurance to start, it introduces the papers related with some basic knowledge and theory, which lay the foundation for the research of this article. Then it explains the major status of auto insurance, and use the methods of the quantitative analysis to analyze, the key of the loss of auto insurance has been in the state is due to the high rate of loss ratio and the high cost of operations in recent years. Meanwhile to look through the essence of the phenomenon, but also the underlying problems in auto insurance losses are showed by qualitative approach. The underlying problems are the fraud of the insurance applicant and the insured, and the increase of loss ratio is caused by moral hazard of the auto insurance agent, and the increase of comprehensive cost ratio is caused by the increase of agency fee.Elaborate on the above issues, the paper also analyzes the problems by the games law of economics. Firstly, dynamic game with incomplete information analysis is used to show the fraud of the insured. Under the current situation of asymmetric information there is no optimal strategy Nash equilibrium, where on the premise of a mixed strategy the insurer will use, the insured will not fraud is conditional. Secondly, static games of complete information model in used to analyze the fraud of the agent. The most of auto insurance agents will fraud in the absence of introduction of rewards and penalties system, this ratio will reduce if the system is introduced into. The factors that whether the agents work hard are only supervision costs from insurance company to the agent and the amount of punishment agents of the agents do not work hard.Finally, the results can be obtained by theoretical knowledge, then put forward a proposal that problems of auto insurance. The deficiency in this paper is also predicted.