| The primary objectives of this dissertation are to analyze the relationship between insurance development and various socio-economic variables, to point out the importance of the insurance industry in a developing country's economic growth, to provide policy recommendations for promoting the insurance industry, and to review and estimate China's potential for insurance development.;With the guidance of a utility-theoretic approach, a model specification is performed on a database with 35 explanatory variables. Four final models are selected using life insurance penetration, property-liability insurance penetration, life insurance density, and property-liability insurance density as dependent variables, and from 7 to 10 explanatory variables and 60 to 61 observations, respectively. Results from the final models include: (1) insurance development is positively associated with the levels of income and education, (2) high inflation tends to restrict life insurance development, (3) some cultural and historic effects are influential in insurance development, (4) insurance is a critical part of the financial industry, (5) monopoly insurance markets tend to restrict life insurance development. It is also found that property-liability insurance tends to be associated with fewer determinants than is life insurance, and that insurance densities are better explained by the explanatory variables than are insurance penetrations.;The dissertation discusses the roles of the insurance industry in economic development, and provides policy recommendations for developing countries to promote insurance, with a stress on the need for an integrated package of government policies.;The case study of China shows that institutional factors play an important part in insurance development during a country's political and economic transition. It also confirms the necessity of a set of interactive government policies to develop insurance in an active and purposeful manner. The application of the statistical models reveals that insurance development in this most populous country in the world has much unrealized potential. |
