China Microinsurance Development

Since 1978,China's reform and opening-up policy has put into practice.The party and government strive to safeguard and improve people's livelihood.The living standard of farmers has been also greatly improved.However,the reform and development of Chinese rural are faced with new challenges."Issues Concerning Agriculture,Countryside and Farmers"("Issues Concerning ACF") is faced with a new crisis.The income of major grain-producing areas and most farmers continues to waver and even to reduce.The income gap between urban and rural residents was to reduce for a time and then to expand further.The report of World Bank pointed out: "Income inequality increased significantly in China,China is not the country that national inequality was in low level a quarter of a century ago.The Urban-rural income gap and also inequality within urban and rural areas are all rising."Issues Concerning ACF" occured in the rapid development of China's market economy process,and the issues' solving can not deviate from the the objective laws or principle of market economic'development.It needs to use a variety of means and take comprehensive measures to solve "Issues Concerning Agriculture,Countryside and Farmers".Risk management system is one of the important aspects to solving the issues.Insurance is the most important market-based risk management approach and plays an important role in today's economic development.In the new century,the CPC Central Committee put out six consecutive documents,named No one Document,to supervise the work of solving "Issues Concerning ACF".In the documents,Cpc Central Committee pay more and more attention to solving "Issues Concerning ACF" by insurance.In the key points of the policy,"Agriculture, Countryside and Farmers"(ACF) insurance appears increased year by year.As one of three pillars of the modern financial system,it is an important issue to be settled urgently that insurance fullly plays its function to meet the development needs and give supports,services and protections to the development of ACF.Although being one of the most important ACF risk management methods, insurance can not play its due role in the existing mode of commercial insurance because of most farmers' low income.Microinsurance is a product that providing mainly to low-income people.It has some characteristics such as appropriate guarantee,cheap premium,popular policies,simple and convenient underwriting and claim,and so on.Microinsurance is an important component of microfinance and an effective financial means of helping the poor.The microinsurance can partly solve the imbalance between supply and demand of ACF insurance.It is significant to develop microinsurance in servicing ACF effectively,improving the rural finance and rural social security system,expanding insurance coverage.After several years of exploration and practice,microinsurance business in China has begun to take shape. Microinsurance plays an increasingly important role in the process of economic and social development.Thus it has far-reaching practical significance to study microinsurance.In this paper,begining with the root and solution approach of "Issues Concerning ACF" in China,â… analyse new solving ideas for the issues in the current circumstances.That is,utilizing insurance,market-based risk management approache, perfect and improve ACF risk management systems.â… also put forward that microinsurance just fits to perfecting ACF risk management risk management systems and the farmers' insurance purchasing power.Subsequently,the paper put forward three issues to be resolved.The first issue is the necessity of the development of microinsurance.The second issue is the feasibility of the microinsurance development.The third issue is the strategy of microinsurance development.The first two problems require theoretical and empirical analysis methods.To solving the third problem is based on the microinsurance system arrangement.In the necessity of the microinsurance development,first of all,â… analyse the risk of ACF and its hazard.By using of classical economics,â… discuss that the purchase of insurance could meet the people's utility maximization.By New Institutional Economics,â… analyze the lack of institution arrangements in the institution changes.At the same time,the analysis is supported by survey results.In the feasibility analysis part,by using classical economic the paper conclude that the farmers would buy full of insurance under no borrowing(savings) constraints.By virtue of New Institutional Economics,â… analyze that microinsurance fits the needs of rural institutional change.Also,the paper analyzes the feasibility of microinsurance in our country with the international experience such as India and other countries.On the base of theoretical analysis,â… analyze the arrangements of microinsurance institution and deduce the strategy for the development of microinsurance.There are total of seven chapters in this paper,the specific sections as follows:The first chapter is introduction and divided into three sections.Sectionâ… describes background,significance and issues of the study.The sections of background and significance are expatiated by means of theory and practice.Sectionâ…¡describes research methods,research ideas,as well as innovation and the lack of of this paper.Sectionâ…¢is mainly related to the research literature review of microinsurance.Chapterâ…¡is divided into two parts:microinsurance and ACF risk.Sectionâ… illuminate the basic situation of microinsurance,including the meaning,systems, basic features,protection,business model and so on.Sectionâ…¡describes ACF risk in detail as person and property risk.Thenâ… discuss the harm of ACF risk and its influence to "Issues Concerning ACF".Chapterâ…¢is economic analysis of microinsurance and divided into three parts. In virtue of utility theory of classical economics,Sectionâ… analyses the demand of microinsurance,the demand of multi-risk insurance,insurance demand's utility of poor families under the borrowing constraints.In accordance with the theory of New Institutional Economics,Sectionâ…¡analyse the lack of risk management insititution in rural reform,Transaction Costs and Property Rights of microinsurance institutional arrangements.At last,Sectionâ…¡discusses that microinsurance arrangements will be in line with market trend of ACF risk management institution's changes.The other relevant theories of microinsurance are discussed in Sectionâ…¢,such as the hierarchy of need theory,rural poverty and anti-poverty theory and the Bottom of Pyramid theory.Chapterâ…£is about empirical analysis of microinsurance's development in China and divided into three sections.In Sectionâ… ,â… discuss questionnaire survey about the demand for microinsurance in Hebei.â… also analyse the influence factors of farmers' insurance demand by means of logistic regression.In sectionâ…¡,â… measure the basic living cost of farmers using the Extended Linear Expenditure System,and then estimated per capita insurance farmers' capacity to pay.In sectionâ…¢the paper describes the status quo of China's microinsurance.In Chapterâ…¤,the international experience of microinsurance is divided into four sections.Sectionâ… discusses foreign microinsurance products by means of Comparative Analysis.Sectionâ…¡discusses microinsurance organization abroad. Sectionâ…¢analyses the operations of microinsurance.Sectionâ…¥analyses the foreign regulatory experience of microinsurance.Chapterâ…¥is the design of China's microinsurance institution arrangements and divided into two sections.Sectionâ… analyse theoretically institution of China's microinsurance arrangements by means of New Institutional Economics theory.â… take Transaction Costs,Externalities,Property Rights theory analysis of the microinsurance arrangements into account respectively.Sectionâ…¡designs our microinsurance institution arrangements preliminarily.The development strategy of China's microinsurance is divided into three parts in Chapterâ…¦.Sectionâ… analyses the market strategy of microinsurance development. Sectionâ…¡analyses the product strategy of microinsurance development.Sectionâ…¢analyses the regulatory strategy of microinsurance development.