A Study On The Relationship Between The China Insurance Market Structure And Industry Performance

After several decades' rapid development,China's insurance industry has undergone tremendous changes,made great progress.Market scale is expanding,the overall situation is good,but there are still some problems that can not be ignored.It is urgent to upgrade insurance market and optimize its structure.It is also urgent for insurance companies to provide differentiated services and products in the purpose of promoting competition,enhancing competition efficiency and improving market performance of the insurance industry.This plays a practical and significant role in allocating insurance resources and improving the insurance level of the whole society.In order to achieve this goal,it is necessary to study the relationship between insurance market structure and industry performance,to clarify the effect and mechanism how market structure affects industry performance,and to provide reference for policy-making departments to formulate relevant policies,promote benign development of insurance industry and stabilize financial order.In order to clarify the relationship between the market structure and market performance of insurance industry in our country,this paper firstly analyzes the development progress of insurance market.Although the development of our insurance market has made great progress,there are still some problems.The results of market concentration show that the market concentration of China's insurance industry has decreased year by year,but still at a high level from 1996 to 2015.Through the empirical analysis of industry-level data,it is found that higher market concentration has a negative impact on the market performance of China's insurance market.The empirical analysis of the company level data further points out that when the insurance market in our country is in a high monopoly or oligopoly stage,the insurance company in Monopoly or oligopoly can achieve better performance,while the performance of other insurance companies will be adversely affected.High market concentration is unfavorable to the development of China's insurance market,and the causes of excessive market concentration are generally divided into three points.First,the development of China's insurance industry is relatively late,the scale of economic effect is more obvious,high concentration of market structure is inevitable in the development of insurance industry;Secondly,the administrative interference distorts the resource allocation of China's insurance market,and promotes the market structure into a high concentration situation;third,the incomplete legal system and the imperfect supervision mechanism can not standardize the development of our insurance market,which leads to a high concentration of the market.Therefore,this paper puts forward some policy suggestions to promote the development of insurance market in China.First of all,we should loosen government regulation,abolish the restriction of private capital and foreign capital,reduce the threshold of exit and encourage innovation.Secondly,we should encourage the development of small and medium-sized insurance companies through merger and reorganization.The expanding scale of insurance companies would enhance the competitive strength of the insurance market by market mechanism.The governance mechanism of large state-owned insurance companies should be perfected,their organization forms should be changed and their management level should be improved.