A Research On Commercial Endowment Insurance Participating In The Construction Of China’s Rural Old-age Security System

China is in the progress of urbanization and industrialization in21st century. With the double impact of urbanization and aging, it will be a inevitable trend that the rural old-age security system turn diversified. At present, China’s rural old-age insurance system is still in its infancy, the farmers’pension level is still low, and commercial endowment insurance is in a low participation level too. With consideration of perfecting China’s rural endowment insurance system, In the future, through the way of urban back-feeding rural and government’s subsidies to countryside, it is necessary to improve the level of rural old-age security. To Promote the improvement of rural security, it’s necessary to promote commercial insurance participating in the construction of rural old-age security system through incentive measures.Chinese government has put forward the policy agreement that economic reform is key, and the core solution is the proper relationship between the government and the market, leaving the market to play the decisive role in allocation of resources in the third Plenary Session of the18th CPC Central Committee. Modern commercial endowment insurance system is a market system, and it can give full play to the optimal allocation of resources in the field of rural endowment. Commercial insurance’s participating in the construction of rural endowment insurance market can break the traditional policy that government should do everything in social security system, Improve market participation in endowment market, and improve the operation efficiency of endowment insurance system.Around the theme of commercial endowment insurance participating in the construction of China’s rural old-age security system, the paper mainly researches on the background, problems and solutions about participating, according to the logical thinking in "why to participate, what to participate","the difficulties and opportunities to face ","how to promote and how to participate". Specifically, the paper studies three aspects of content. Firstly, the rationality and feasibility about commercial endowment insurance participating in the construction of China’s rural endowment insurance system; secondly, current situation of China’s rural insurance market, the difficulties and opportunities that encountered during the process of participating development; thirdly, the direction and countermeasures about how to improve the participating level in long-term, medium-term and short-term. As to the rationality and feasibility about commercial endowment insurance participating in the construction of China’s rural endowment insurance system, this paper discusses three factors from sociology and economics. Firstly, analyzes the relations of government, market, personal in the view of fairness and efficiency, discussed the unfair status that farmers has long been encountered relative to urban residents in the long-standing dual conomic structure, and the ineffective treatment of old-age security. To Promote the development of social justice, town economy should make feedback for the rural pension system.With actuarial method, the paper concluded that the current rural social endowment insurance system (urban and rural insurance system) can only give low levels of actual pension benefits in the future; With the analysis of social endowment insurance system in present, the paper concludes that the fund account of Urban and Rural Residents Endowment Insurance will face the difficulties of imbalances and unsustainability in the future.Through the above analysis, the paper’s view is that the commercial endowment insurance has a essential position in rural endowment insurance system, and government should take some measures to promote its development in rural areas through premium subsidies and other ways.Secondly, the paper analyzes the function (including commercial endowment insurance and social endowment insurance)to rational insured people with government’s premium subsidies,especially to their lifetime utility improvement.With assumptions of rural-economic-system and urban-rural-economic-system, the paper analyzes the impact on the society steady output and social justice that premium subsidies might bring:Government subsidies will reduce society’s savings, thereby lowering the speed of economic growth, but can effectively promote the social justice.The above analysis shows that commercial endowment insurance’s participation can promote social fairness and efficiency, The government’s incentive measures can promote rational individual’s enthusiasm to buy more commercial endowment insurance. Thirdly, the paper analyzed the relative advantage of commercial endowment insurance to social endowment insurance:In some rural areas with rapid economic development, farmers’ purchasing power is increasing quickly, commercial endowment insurance can meet farmers’different endowment demand, and raise the level of the old-age security of people; government’s subsidies incentives can promote the development of insurance market thereby promote economic development, and then promote the social fairness.Finally, the paper analyzes the participation way that commercial endowment insurance can adopt in rural endowment insurance system construction:insurer should participate in the construction of rural endowment insurance system actively, while government’s push is one of the most important, and only with government’s promotion with can insurance companies improve the permeability in rural insurance market; commercial endowment insurance can also participate agency services of rural society endowment insurance to improve the comprehensive efficiency of rural endowment insurance system.As to the current situation of China’s rural insurance market, difficulties and opportunities that encountered during the process of participating development, the paper discussed this theme from three sides:Firstly, the rural insurance market faces the difficulties of under supply and insufficient demand. Due to the high business cost, immaturity of market, Lack of promoting policies and other reasons, insurers have no incentive to enter rural market; due to weak purchasing power,farmers have no ability to buy insurance in the absence of government’s promoting.Secondly, people’s traditional pension and savings culture are two obstructive factors that hindered the development of commercial insurance in countryside. Chinese people have strong family values and culture, people tend to rely on their children or family later in life, or rely on self-help when the are old. Chinese people have high propensity to save, but they always distrust commercial endowment insurance with saving nature, and usually put money in the bank or hold money in hand.Thirdly,China’s rural economic development and the improvement of farmers’ income, the government’s emphasis on rural livelihood issues will provide commercial endowment insurance good development opportunity in the rural pension system construction.This paper analyzes the old-age status and commercial endowment insurance demand in rural areas.Through expert consultation, following the design principle of index system and considering the accessibility of data, the evaluation index system of rural commercial endowment insurance development potential is established. Based on the perspective of the county, collecting the macro data affecting the development of rural commercial endowment insurance development, by adopting the method of factor analysis and cluster analysis, the rural commercial endowment insurance development potential in Sunan area is evaluated and classified. Based on the classified results and according to the large sample data from sampling, the population sociology characteristics of adult rural permanent resident at typical areas in Sunan are analyzed. And then the investigation about the altitude, the perception, the purchase intention and the payment ability to commercial endowment insurance is studied. The results are showed that the farmers in Sunan, in general, have the low identity and payment ability to commercial endowment insurance.Based on the chi-square test, the influence factors of the farmers’demand commercial endowment insurance in Sunan are analyzed, applying the ordered variable selection model tacking the logistic distribution function as the coupling function, the ordered variable regression function is established.As to the direction and countermeasures about how to improve the participating level in long-term, medium-term and short-term, this paper analyzed from two aspects of content. Firstly, the paper analyzes multi-pillar pension system in some typical countries and regions, and studies the characteristics of these endowment insurance systems. The results show that in the first aspect, the coexistence and coordinated development of multi-pillar pension system is the necessary way of to systemic raise the level of rural old-age security, and the pay-as-you-go pension system that relied on the government’s control shouldn’t be sustainable when countries decade to a rapid aging of society; Government should play a fundamental role in the process of commercial endowment insurance anticipating in old-age security system construction. Only under the leading of the government, along with government’s preferential policies, can commercial endowment insurance develop well in rural areas; Government should pay full attention to characteristics of farmers’old-age security demands, and raise the level of their old-age security through good system settings and preferential policies; Government should incentive rich peasants to join in the commercial insurance plans, and by this demonstration, to strengthen people’s consciousness to be responsible for their own old security.Secondly, the paper analyzes the countermeasures that can promote the development of commercial endowment insurance in China’s old security system construction in rural areas. On the one hand, five-pillar system should be established adapt to the economic development in China, the role that commercial endowment insurance play in this system should be strengthened and improved in the long term; On the other hand, commercial endowment insurance should be promoted through market operating under government’s guide, and in this process government should play a leading role in Specifying policy terms and making premium rate.and so on in the medium term. At the same time, all kinds of agricultural subsidies given by authorities can unified into a unique commercial endowment insurance account to improve replacement rate level and endowment insurance participation consciousness. In the process, the insurance enterprise shall comply with the principles of little profit involved in the management of insurance products. Finally,In the short term, insurance companies should pay more attention rural endowment market, and strengthen product innovation according to the characteristics of people’s demand in rural market, in order to satisfy the demands of farmers to meet farmers’multi-layered and diversified demand.