Empirical Study On The Influencing Factors And Regional Difference Of Insurance In China

Since the reform and open up, the insurance industry in our country has alwaysmaintained a strong growth momentum. It is one of the fastest growing industries innational economy and has become an indispensable component in socialist marketeconomy. The insurance market in China has also become one of the most dynamicinsurance markets in the world. According to international experience, the fast growthperiod of insurance industry is also a period when issues get exposed frequently.During the current phase, there is not sufficient effective demand in insurance industry.It lacks innovative service and high quality talents. The structural conflict ofunbalanced regions has surfaced more and more prominently. In2011, theinternational and domestic economic and financial environments were complicatedwhile there were huge fluctuations in the monetary and capital market. Theequilibrium cannot be reached between supply and demand in the debt market and theprofit cannot be promoted. The stock market crashed most emphatically in the worldwhich affected seriously the investment return. In all, the pressure and risk aregrowing in applying insurance capital in both foreign and domestic markets while thesupervision departments are also faced with new issues and challenges.Based on consulting a large amount of literatures related to insurance industry development,this paper elaborates the non-economic influence factors which effect the growth of our insuranceindustry development, applying fixed effect model to conduct regression analysis on therelationship between the total insurance premium income and GDP, balance of bank deposit ofresidents at end of the year and PCDI (per capita disposable income), with the panel data in30provinces and cities in China over2002-2011. The result shows: there is respectively positivecorrelations between the total insurance premium income and the three variables of GDP, balanceof bank deposit of residents at end of the year and PCDI, with PCDI contributing the most,balance of bank deposit of residents at end of the year contributing secondly while GDPcontributing the least. Then, this paper compares the developed scale, development degree andpace of insurance industry among the insurance industries in three major regions in the eastern,middle and western China. It selects the8indexes to build an evaluation system from30provinces and cities in2011nationwide, applies SPSS software to conduct principle componentanalysis and cluster analysis and classifies the30provinces and cities into4categories accordingto the insurance industry level. The result shows: the main influence factor in insurance industrydevelopment is its dynamic factor: there is evident difference in insurance industry developmentamong regions which can mainly be seen as the eastern region is developed while the regions in mid-west China are not. Based on theoretical and empirical analysis, this paper proposes thesuggestions for our domestic insurance industry to overall coordinate for the sustainabledevelopment. From the perspective of the development of insurance industry, it should accelerateinformation construction, apply the talent-focused strategy to develop the industry, complete theservice system of reinsurance and etc. From the regional perspective, the eastern area should makeuse of the advantages on capital to cultivate the core technology, promoting the innovation ofproducts and services. The Midwest area should speed up economic development and developsome special insurance breeds which can convert potential resource advantage into realcompetitive advantage. Moreover, regional insurance integration is the new requirement forinsurance industry under the background of regional economic integration.