Study Of The Factors Influencing The Pay Ratio Of Auto Insurance In Jiangsu Province

Jiangsu province had the possession of 19.19 million civilian automobiles at the end of 2019,ranking the third in China.It is also the developed province in the east coast of China.During the same period,Jiangsu province’s auto insurance premium income accounting for 74.68% of the property insurance premium income.However,insurance companies are facing severe challenges in auto insurance business operation because of the fierce competition.On the other hand,the current situation of high pay ratio is that the auto insurance business in Jiangsu province has been faced with the problems of high pay ratio and low underwriting profit margin.Only by optimizing the pay ratio can higher profit space and service quality be achieved.Therefore,this paper selects typical Jiangsu province to study the factors influencing the pay ratio of auto insurance.Based on the auto insurance data of 13 prefecture-level cities under the jurisdiction of Jiangsu province,this paper studies the factors that affect the pay ratio of auto insurance in Jiangsu province and puts forward countermeasures and suggestions for the optimization of the pay ratio of auto insurance.On the basis of large literatures,this paper shows the process of reform and points out the current situation and risks of the auto insurance market in Jiangsu province.Then,this paper identifies the internal and external factors affecting the auto insurance pay ratio,and makes PEST analysis on the auto insurance market.Then,on the basis of summarizing previous studies,this paper innovatively selects two risk factors,namely annual precipitation and unemployment rate,and policy factors of the market-oriented reform of auto insurance premium rate,and selects key factors influencing auto insurance pay ratio among various internal and external factors.Finally,the selected key internal and external factors are summarized into four categories for empirical research.In this paper,panel data of the auto insurance market of 13 prefecture-level cities under the jurisdiction of Jiangsu province from 2002 to 2018 were selected,and the system GMM model were used for regression analysis.The results show that: policy factor has significant effect on reducing the pay ratio of auto insurance.Among the insurer factors,the share of auto insurance business has the greatest influence on the auto insurance pay ratio.Among the risk factors,the annual precipitation has a significant effect on the auto insurance pay ratio.Among the macro factors,the regional economic development level has a significant negative effect on the auto insurance pay ratio.The conclusions show that,governments,regulators and the insurance companies should cooperate and coordinate with each other to optimize auto insurance pay ratio.First,the government needs to promote economic development and strengthen urban infrastructure.Secondly,regulators should continue to deepen the rate reform and strengthen the management of intermediary market.Finally,insurance companies need to constantly optimize the structure of property insurance business,strengthen risk control management,and innovate auto insurance products and marketing channels.This paper puts forward corresponding suggestions for the government,regulators and insurance companies respectively,hoping to provide useful references for optimizing the pay ratio of auto insurance and creating business profits.