The Research On The Decision Making Of Family Property Insurance Potential Customers

Due to the frequent occurrence of extreme weather because of climate change and the concentration of risk targets caused by urbanization,extreme events such as fires,typhoons,rainstorms,floods,hails,snowstorms and lightning strikes have caused more and more serious family property losses to Chinese residents.As family property insurance that has existed since the recovery of insurance business in China,it has low premiums,a wide range of insurance targets,comprehensive insurance responsibilities,high insurance amounts,and no deductibles.The country has also adopted “Several Opinions on Accelerating the Development of Modern Insurance Service Industry”,“The National Comprehensive Disaster Prevention and Mitigation Plan(2016-2020)”,“The Proposals of the Central Committee of the Communist Party of China on Formulating the Fourteenth Five-Year Plan for National Economic and Social Development and the Long-term Goals for 2035” and a series of policy documents to promote the establishment of a catastrophe insurance market system.However,regardless of the proportion of family property insurance premium income or the proportion of Chinese households purchasing family property insurance,the problem of insufficient demand in the Chinese family property insurance market is very serious.This has an adverse effect on the stability and sustainable development of Chinese economy and society.In the face of the “anomalies” in the Chinese family property insurance market,the risk decision theory in neoclassical economics cannot reasonably explain it,let alone put forward policy recommendations to solve the problem.The economics profession and the industry are eagerly looking forward to the improvement of the theoretical model of potential customers insurance decision-making and the innovation of related research methods.After analyzing the literature on irrational behavior of family property insurance,and absorbing the research results of Behavioral Economics,Behavioral Finance,Experimental Economics,Econometrics,Questionnaire Survey,Psychology,etc.,from the belief network world view,methodology of scientific research programmes and the theoretical basis of interdisciplinary study,this article establishes a research paradigm for irrational behavior in the insurance market.According to this paradigm,this article discusses in detail the micro-foundation of family property insurance potential customers decision-making and constructs a related model based on the attenuation theory,drive-reduction theory,information cost theory and existing risk decision theories.Subsequently,in order to obtain the potential customers characteristic data needed to test the theoretical model,learning from the practical principles of questionnaire surveys and economic experiments,this article designed a survey experiment that integrates the collection of personal characteristic data of participants and the test of treatment effects.Through the special topic group consultations,in-depth personal interviews and field surveys,the quality of the survey experiment design has been tested.Using the sample service of professional questionnaire survey platform Wenjuanxing,this article conducted a large-scale formal experiment on the potential customers decision-making behavior of Chinese family property insurance.After cleaning up invalid samples,this article collected a total of 1048 experimental samples for convenient sampling and stratified random sampling from all over the country.So as to ensure the authenticity and validity of the empirical conclusions,this article uses a variety of research methods to analyze the survey experiment data.Synthesizing controlled experiment analysis,econometric analysis and experimental introspection analysis,with potential customers family property risk perception and family property insurance needs as the main analysis objects,this article has conducted an in-depth research on the decision-making mechanism of family property insurance potential customers.The main conclusions drawn in this article are as follows: First,the lack of family property insurance related stimulus is an important reason for the insufficient demand for family property insurance in China.Whether it is a combined data analysis,a comparative analysis between groups,or a comparative analysis within the group,after receiving family property insurance related stimulus,the proportion of experimental participants who perceive family property risks,the proportion of willingness to insure family property insurance,and the average family property insurance willingness to pay has been doubled,and the related non-parametric tests also significantly rejected the null hypothesis that the samples before and after the stimulus came from the same population.Second,the attenuation theory can better explain the family property risk perception behavior of potential customers in the survey experiment.Due to the characteristics of human recall,the cost of information retrieval,and the cost of attention purchase,there are risk information differences among potential customers.After receiving the stimulus,family property risks enter the cognitive process of potential customers.By selectively considering the degree of extreme event aversion,the degree of aversion to family property risk loss,the subjective probability of family property risk and other factors,potential customers form subjective feelings about family property risk loss and family property risk occurrence probability and through these perceive family property risk.Third,the drive-reduction theory can better explain the potential customers decision-making behavior of family property insurance demand in the survey experiment.After receiving the stimulus,potential customers who perceive the risk of family property can use a more“rational” way to make decision.By means of the internal driving force index of the family property insurance which bases on the degree of aversion to extreme events,the degree of aversion to family property risk loss,the subjective probability of family property risk and so on and risk management habits such as family property insurance purchase history and the proportion of family property insurance purchases by relatives and friends around you,family property insurance potential customers can assess their insurance needs and make family property insurance decisions.Finally,according to the decision-making model of Chinese family property insurance potential customers,this article proposes some policy recommendations to solve the problem of insufficient demand for family property insurance in China,such as property insurance companies establish service centers of offline agency for centralized marketing and conduct identity marketing,real estate and property management companies subsidize householders to purchase family property insurance and initiate group family property insurance contract customization and the government make limited term tax relief and billing incentives for family property insurance business.