Analysis On Influencing Factors Of Engineering Insurance Demand

Engineering insurance is a special kind of the property insurance, accompanied by the progress of science and technology and social development, and mainly puts civil building projects of various types of industrial, civil and public utilities as insurance object. At present, engineering insurance of the countries in the world where insurance industry is developed has entered the specialization, systematization and modernization stage, and our engineering insurance started late, as an important means of risk management in the market economy, engineering insurance does not be used widely in construction projects and the construction industry.Generally, covering the engineering insurance is forced in the project management of foreign countries, and public projects invested by government and financing projects of financial institutions must be insured engineering insurance. If the project was uninsured, the banks would not loan to the project, and at the moment of bidding, uninsured contractor would not have bidding qualification. The United States, Japan, Germany, France and other countries formulate legislation where public engineering projects must be insuring the engineering insurance. In Europe and the United States,"three force" method of the government, banks and market is carried out, namely the government legislation forces the contractor to have insurance, banks will not loan to the uninsured items, and contractors without corresponding engineering insurance in the bidding will be eliminated. The implementation of these measures ensures the engineering insurance to promote powerfully in foreign. Today, rapid economic development, more infrastructure projects, growing scale, and constant growth of fixed asset investment in China, make our engineering insurance develop rapidly, but the proportion about engineering insurance’s premium income of the total social fixed assets investment over the same period does not change much. Promoting the healthy development of China’s engineering insurance has an important sense to promoting economic construction. Based on the statistical data during2002-2010, the paper selects GDP, value added of the construction industry, value of construction and installation engineering investment, the number of highly educated people in urban employment of the construction industry and market concentration degree (CR4) as explaining variables, engineering insurance premium income as explained variables, and studies the influence of these factors on engineering insurance demand by regression analysis, and puts forward the policy recommendations. Research ideas and the logical structure of this paper as follows:The first chapter, the introduction part, expounds the research background, significance, domestic and international literature review, research purpose, content and methods as well as the innovation and the insufficiency.The second chapter, engineering insurance summary and the influence factors of its demand analysis. First, the project risk and project insurance are overviewed briefly, and engineering insurance status in China is reviewed. Engineering insurance developed in China relatively late, and just began formal engineering insurance in1979, then obtained rapid development and made some exploration, but China’s engineering insurance has a big gap compared with foreign. The main problem of current domestic engineering insurance is the low rate of insurance and single insurance variety, and specifically the current problems include:legal system, insurance consciousness, lack of personnel, lack of intermediary market development, single insurance product and the unbalanced development. Finally, it analyzes the influence factors of engineering insurance demand. Through the theoretical analysis, it is estimated that the project construction faces more risk, from the risk perspective, if the presence degree of risk factors was greater, and the scope was broader, the total number of insurance demand would be greater. Therefore, the study thinks that the demand of engineering insurance is directly proportional to the degree of risk factors, contractor should have a greater demand for insurance; the level of decision layer education is higher, the desire for engineering insurance is bigger; the wealth and income level of industry is higher, the consumption capacity is stronger, and the construction insurance demand is increased more; the premium rate has an important influence on demand for engineering insurance, generally we view insurance as normal goods, so its impact on the engineering insurance meets the demand law; compulsory insurance expand the insurance demand by government’s actions, from the experience abroad point of view, compulsory insurance of engineering insurance will become a direction of domestic development etc..The third chapter, the empirical analysis about influencing factors of engineering insurance demand, first, data sources and selection of variable are explained, and then, the model is built and analyzed. The paper selects statistical data during2002-2010, and selects individual alternative variables for study because of the difficulty in data acquisition. In the process of regression analysis, it is found that the collinearity of variables is much serious, and because the collinearity of variables will have a greater impact on the regression results, the method of principal component analysis to process the collinearity, so as to get the ideal results.The fourth chapter, the basic conclusions and suggestions, through the analysis of the regression results, we found that GDP, value added of the construction industry, value of construction and installation engineering investment, education degree (the number of highly educated people in urban employment of the construction industry) play a positive role in promoting demand of engineering insurance, the promoting effects of value added of the construction industry and value of construction and installation engineering investment are much more obvious, and the effect of value added of the construction industry is most evident. A negative correlation is showed between market concentration degree and engineering insurance demand, that is to say, the decline of market concentration degree will promote engineering insurance demand to increase. According to the research results, the paper puts forward some advice about aspects of government, the insurance industry and the construction industry, and I hope these measures can promote development of engineering insurance to be sustained and healthy.At present, domestic related literature and research on influence factors of property insurance demand are more, but engineering insurance articles are less, and selected explanatory variables are rare, research results of engineering insurance demand remains to be tested through practice. In this case, the literature we can refer and learn is limited, and this paper introduces more variables in the study, studies the influencing factors of engineering insurance with multiple regression method, and solves effectively the collinearity problem among variables through the principal component analysis, finally gets the empirical results. I hope to find out the real factors which have a greater impact on engineering insurance, so as to guide the development of domestic engineering insurance. Deficiencies are that the paper fails to select the optimal variables and more years to study because of the statistical data restrictions, the theoretical analysis is not enough, and the value added of the construction industry sector’s influence is most obvious in the analysis results, and the value is much larger, although it passes the test, but its accuracy and validity are still worth to investigate. At the same time, the views and suggestions are much more macroscopic due to lack of practical experience, and they still need to undergo the test of practice.