Bancassurance Development In China And Its Effect On The Efficiency Of Life Insurance Companies

The bancassurance of China started in the 1980 s and then grew rapidly after 2000. Even though, due to fluctuations of the policies, the development of bancassurance was affected and obstructed, the bancassurance still brings a large part of income to life insurance companies. Which means the bancassurance has a significant impact on the efficiency of life insurance companies. Currently, the studies of bancassurance in the academic are mostly focused on the definition of bancassurance, the reason for its emergence, the cooperation mode selection and the risk prevention etc. However, the effects of bancassurance on the efficiency of life insurance companies are rarely involved. Based on the fully analysis of developments and problems of bancassurance in China, this paper tries to show the effects of the bancassurance on the life insurance company in both qualitative and quantitative ways.Firstly, this paper introduces the background of bancassurance in China specifically; Secondly, the effects of pure technical efficiency and scale efficiency on the efficiency of life insurance companies are detected qualitatively, when technical efficiency, pure technical efficiency and scale efficiency are normally treaded as indicators of life insurance company’s efficiency; Thirdly, building the panel data of 10 representative life insurance companies in Chinese market from 2012 to 2014, and then using Data Envelopment Analysis(DEA) and Tobit regression model to make the empirical analysis:(1) measuring the samples’ technical efficiency, pure technical efficiency and scale efficiency with Input Oriented Data Envelopment Analysis, and treating them as dependent variables.(2) making proportion of premium income of bancassurance, the number of cooperation network, the proportion of regular premium income of bancassurance and whether a sample is a Banking Insurance company as independent variables.(3) using the variables above to do a regression with Tobit model. Conclusions of this study are as follows: the proportion of premium income of bancassurance, the number of cooperation network and whether it’s a Banking Insurance company have a significant positive effect on the technical efficiency and scale efficiency, while they have no significant effect on the life insurance company’s pure technical efficiency. Additionally, the proportion of regular premium income of bancassurance has a significant negative effect on life insurance company’s technical efficiency and scale efficiency, while it has no significant effect on its pure technical efficiency.The innovation of this paper is mainly reflected in the following aspects: Firstly, few of domestic and foreign scholars’ concern the effect of the bancassurance on the life insurance company’s efficiency at present. This article analyzes how the bancassurance effect the life insurance company’s efficiency, which is beneficial to enrich the research of this field. Secondly, when doing the quantitative analysis, this paper selects the proportion of premium income of bancassurance, the number of cooperation network, the proportion of regular premium income of bancassurance and the whether it’s a Banking Insurance company and other four variables, and the previous study variables were properly adjusted.