A Study On Operating Efficiency About Professional Agricultural Insurance Companies In China

Rural issue has always been a top priority of China and the Party, the central "No.1 document" has been requesting the agricultural-related insurances to be more systematic and standardized for years. Agricultural insurance in many developed countries are only run by professional agricultural mutual insurance companies, the specialized management of China's agricultural insurance started late because of the agricultural insurances in China are related to some special national policies, there was no professional agricultural insurance company in China until 2004. Long ago before 2004, domestic scholars have accumulated rich research results regarding the operating conditions and efficiency of China's insurance companies, but there is no specialized research on agricultural insurance companies especially on the specialized ones. After nearly ten years of development, how are the four operating now and how about their operation efficiency? This essay takes these four specialized agricultural insurance companies as research subjects, and analyzes their operation conditions and efficiency from the date of their establishment to 2014.Firstly, the essay begins with the development of these four specialized agricultural insurance companies, and introduces the establishment time and the nature of China's specialized agricultural insurance companies as well as their business lines and scope. Then in order to understand the financial condition of these companies, the essay analyzes the the operation conditions of these four companies according to premiums income and compensation expenses from its establishment until 2014, and measures the profitability, solvency and growth capability respectively using the underwriting margin, ROE, asset-liability ratio, liquidity ratio, premium income growth and asset increase rate. Secondly, the essay measures and evaluates the comprehensive technical efficiency, pure technical efficiency and scale efficiency of these four companies by leveraging the DEA based on business efficiency theoretical analysis, and further analyze their dynamic changes by leveraging Malmquist index model. The measurement results turned out that the pure technical efficiency of Chinanese specialized agricultural insurance companies is the highest while the comprehensive technical efficiency and scale efficiency are at a good level, however, the productivity changes can be influenced by technology, the productivity showed growth only during 2011 to 2012 and during 2013-2014. Finally, based on theoretical and empirical analysis of the agricultural insurance, the essay proposed four suggestions from the perspectives of investment income, expense management and enterprise innovation, it proposed that the regulatory authorities should loosen the investment restrictions for agricultural insurance companies, strengthen the expense management, and develop specialized insurance agencies along with its product technology innovation, insurance regulatory policies to deal with the relationship between its efficiency and stability.