A Study On The Institutional Change Of Chinese Insurance Industry And Its Performance

The process over fifty years of insurance industry development in New China falls into the period of foundation and development, the period of closing down domestic insurance operation, the period of renewal and restoration and the period of all-over development, involving plenty of complicacy of institutional change. On the basis of the relative theories of neo- institutional economics and industrial economics, this paper gives an analytic demonstration on the process of institutional change of Chinese insurance industry from the aspects of property right structure, national action and ideology, fully evaluating the performance of institutional change of Chinese insurance industry.This paper holds the opinion that property right system is the most nuclear and elemental institutional variable of Chinese insurance industry, and the inefficiency resulting from endogenetic conflict of national property right is the fundamental cause of property right arrangement of Chinese insurance industry, containing the shifting from monopoly national property right to concurrent mixture of public property right and private property right, and Chinese insurance industry also developing from national monopoly industry to national leading and varied forms competitive industry. The state decides the property right structure and the supply of public products and service according to its utility functions, and whichever establishment of national monopoly property right pattern, closing down home insurance operation or gradual retreat from insurance property right border, it is the inevitable choice of utility maximization of the state under the institutional conditions of the time. At the same time of re-defining the property right structure of insurance industry, the state has been revising and adjusting the game theory, and has been reducing the transaction costs, to make production maximization of the insurance industry, to achieve the state utility maximization. Ideology is the most important institutional arrangement in reducing transaction costs of other institutional arrangement. The traditional ideology, which has been on the basis of agricultural society with the feature of self-sufficiency and self-saving and dealing with risks by administrative remedy, and people's insurance ideas dropping off by closing down home insurance over twenty years have deactivated the development of commercial insurance. With the development of social productive force and the adjustment of production relation since China's reform and opening to the outside world, with the reform of system of social security as old age support, unemployment and medical care and cut in information costs, people'sinsurance consciousness have boosted apparently, and commercial insurance as an effective mean of transferring risks has been realized and accepted gradually. The change of ideology gives institutional change of insurance industry a great push forward.This paper evaluates the performance of institutional change of Chinese insurance industry from the aspects of the performance of market operation and the performance of macro-economy. It states that the performance of market operation of institutional change of Chinese insurance industry is marked by rapid expansion of business scale, improvement of efficiency of distribution of resources, progress in insurance technology and obvious improvement in solvency, and the performance of macro-economy marked by lightening financial burden, promoting the reform, expanding the range of employment and improving the financial system.