| Since the 21 th century,American subprime mortgage crisis has made countries to pay attention to financial risks.Due to the impact of the Covid-19,the financial market of the world has fallen into huge uncertainty,China Banking and Insurance Regulation Commission pointed out: “The task of preventing and resolving financial risks is still arduous”.The life insurance companies,as an important subject of China insurance market,life insurance has a unique vulnerability and sensitivity.There are many complex which cause the business risk,but the risk often causes from the business lines,Therefore,the relationship between product concentration and business risk of life insurance companies needs further study.From a realistic background,the current motive power of the industry has changed.From focusing on the expansion of market scale to focusing on the high-quality development of products and services.Although each company has its own innovative products,it seems to be so many life insurance product in the market,but the product homogenization phenomenon is serious,leading to vicious competition between companies,and even cause business risks.The life insurance companies a re bound to transform from product development and change the blind expansion of product scale,despise the management of risk.so the company of life insurance should seek long-term development strategies that can re-optimize the product concentration of life insurance companies to prevent operating risks.Therefore,in the critical period of the transformation and development of the life insurance industry,we need to from the perspective of theoretical background,the implementation of product concentration or diversification is a hot issue of concern to the insurance theoretical circles.From the perspective of theoretical background,the Choice of development strategy of product Specialization or diversification is a hot issue which cause the concern to the insurance theoretical circles.The related theories are mostly applied to performance analysis,while risk analysis is less,and life insurance product has the characteristic of lagging earnings and high infectivity of risk.Therefore,the research on the impact of product concentration on business risk has important theoretical and practical significance.Based on realistic challenges and theoretical background,this article raises the following key questions: First,will the product concentration of life insurance companies affect business risks? Second,the regional development of life insurance market is unbalanced.Does the regional market competition have a moderating effect on the relationship between product concentration and business risk? As t he degree of regional market competition changes,will its marginal effect change? Third,under different life insurance market levels and ownership structures,is the impact of product concentration on risks heterogeneous? Fourth,in the process of optimizing product concentration,which types of insurance products are specifically developed to help to control risks?In order to explore the above-mentioned series of core issues,this article takes the study of the impact of product concentration on business risk as the starting point,and uses two methods of normative analysis and empirical analysis to systematically and comprehensively analyze the impact of product concentration on business risk.The basic idea of the full text is to first analyze the concept and measurement of product concentration and business risk,and define business risk as three aspects: surrender,underwriting risks and investment risk.Then it conducts theoretical research on the influence mechanism of product concentration on business risk.Then it deeply analyzes the current environment of the current life insurance product concentration and operating risk level in my country,and then design empirical tests on the three dimensions of surrender,compensation and investment risk from product concentration,to answer the question of how product concentration affects operating risk.Finally,it provided policy recommendations on life insurance companies and government regulatory agencies should improve their product development strategies and prevent business risks.This article follows the above research ideas,and the full text is divided into five parts.In addition to the introduction,the first to sixth chapters of this article focus on the following five aspects.The content arrangement is as follows:The first part focuses on the analysis of the theoretical transmission mechanism of product concentration to business risk,which is the first chapter of this article.First,define related concepts such as product concentration and business risk.On this basis,it analyzes and combs the relevant theoretical basis of product concentration affecting business risk,focusing on the theoretical mechanism of product concentration to business risk,and the modulation action of product concentration and surrender and compensation risk by regional market competition.Finally,it analyzes the influence mechanism of product structure on business risk which about the process of optimizing product concentration.The second part describes the change trend and current characteristics of product concentration and risk of life insurance companies,which is the second chapter of this article.The second chapter describes the characteristics of seven geographic regional markets,the product concentration and product characteristics of life insurance branches in each city,based on the data of life insurance companies in my country,and analyzes the changing trends of business risks.The study found that regional life insu rance market is unevenly developed,and there are large differences in market competition in various regions,showing a distribution from high to low in the east,middle and west,and the product structure is spatially differentiated.This is why this article uses vector distance to measure life insurance.The company's relative product concentration provides a realistic basis;the product concentration of life insurance companies shows regional differences.The average product concentration of prefecture-level life insurance companies tends to be concentrated in the more developed regions in the east,while the lower ones are generally located in the western region;finally,from the three major risks of surrender risk,underwriting risk and investment risk,it is found that the surrender risk and compensation risk are quite different from the seven geographical regions.Which also different from Chinese and foreign companies;investment risks have shown an upward trend in volatility in recent years.The third part empirically studies the impact of product concentration of life insurance companies on underwriting risks,which is the third and fourth chapters of this article.Underwriting risks mainly include surrender risk and compensation risk.First,the du al fixed effects model plus instrumental variable method is used to perform benchmark regression analysis on the influence of product concentration on underwriting risk;second,the adjustment effect of market competition on product concentration and under writing risk is studied,and the marginal effect is calculated.Thirdly,the impact of product concentration on underwriting risks is analyzed according to different life insurance market development conditions,marketization development levels,and ownership.Finally,it further analyzes the influence mechanism of product structure on underwriting risk,and analyzes the heterogeneity of underwriting risk by product structure under different product concentration levels.The fourth part empirically studies about the impact of product concentration of life insurance companies on investment risk,which is the fifth chapter of this article.First,use the dual fixed effects model to test the impact of product concentration on investment risk.Second,conduct a sub-sample study based on company size and ownership.Third,further analysis of the impact of concentrated development of different products on investment risks.It analyzes the heterogeneity of the impact of various life insurance product structures on investment risks under different product concentration levels and change about product structure adjustment policies.The fifth part is the sixth chapter of this article,which summarizes the research conclusions of this article,and puts forward relevant p olicy recommendations based on the main research conclusions.Through the above research,this article draws the following main conclusions:First,there is a significant negative correlation between product concentration and surrender risk.Improving consumer satisfaction is an important mechanism for product concentration to reduce the risk of surrender.Regional market competition has strengthened the effect of product concentration on reducing the risk of surrender.In areas where the life insurance market is more developed and market-oriented,product concentration has a greater negative impact on the risk of surrender;foreign companies benefit from the product concentration strategy.For companies with high product concentration,focusing on the development of long-term traditional products can reduce the surrender risk.The excessive development of savings products and investment products cannot reduce the risk of surrender.Second,product concentration is significantly negatively correlated with compensation risk.Regional market competition has strengthened the effect of product concentration on reducing the risk of surrender.In areas with a more developed life insurance market and a high level of marketization,product concentration has a greater negative impact on claims risk;foreign companies benefit from the relative product concentration strategy.When the compensation risk is at the 25% and 50% quantile levels,the negative effect of product concentration on the compensation risk is more sign ificant;for life insurance companies with high product concentration,the proportion of traditional life insurance is inversely related to the compensation risk.U-shaped relationship,savings and investment life insurance have a positive U-shaped relationship with compensation risk.Third,the impact of product concentration on investment risk is a non-linear U-shaped relationship.For companies with high product concentration,the development of traditional life insurance and savings-type life insurance is significantly negatively correlated with investment risk;There is a nonlinear relationship between the proportion of investment-type life insurance and investment risk,after the policies of product structure adjustment,the investment-type life insurance on investment risk is not significant.Compared with existing research,the main contributions of this article show about the following four aspects: First,the research perspective has a certain degree of innovation.First,this article systematically studies the impact of product concentration on business risk,especially the research on product concentration and investment risk is relatively rare.The second is to analyze the adjustment effect of market competition on product concentration and underwriting risk.This article uses local level life insurance companies as a sample,based on the national conditions of unbalanced regional development of the life insurance market,combines market competition theory with diversification theory,and analyzes the marginal effect of product concentration on underwriting risk as the regional market competition changes.The change in value has enriched the theoretical research related to product diversification.Third,the research in this article finds that the c onsumer complaints are one of the important mechanisms by which product concentration affects the risk of surrender.Different from the original literature about surrender behavior,which often focuses on hypotheses such as emergency funds and interest rat es,this article analyzes the impact mechanism of product concentration on surrender risk from the perspective of the mismatch of insurance resource supply and the perspective of market information transmission.It provides a useful supplement for the mainstream theory.The last is that the research has found that focusing on the development of traditional life insurance products and the balanced development of savings products can reduce operating risks.In the process of optimizing product concentration of life insurance companies,this article further divides life insurance products into traditional protection,savings and investment life insurance,and systematically studies the impact of different types of products on surrender,compensation and investment risks.Based on the research conclusions of this paper and the reality of the development of life insurance companies in China,this paper mainly puts forward the suggestions from the following five aspects.First,life insurance companies should appro priately implement the product centralization development strategy according to market competition and their own situation.Second,we should focus on the development of long-term traditional life insurance products and give consideration to the developmen t of savings products.Third,break down the barriers between product development and sales departments and establish a customercentered organizational structure;Fourth,pay attention to the product development end and investment management which about plan in entirety;Fifth,take product concentration as an important index of risk supervision of life insurance companiesHowever,due to the space and capacity limitations,the dimensions of this empirical study mainly adopt parallel research,and the exploration of the relationship between various risks is an important direction for subsequent research in this article.this article only analyzes business risks from three aspects as the availability of data from subbranch,which about surrender,compensation and investment.For other aspects of business risks,product concentration may be also have an impact on it,which needs to be further comprehensive.the study. |
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