Strategies Research On The Principal-Agent Problem Of China' S Bancassurance

As the joint financial market system being established in the 1980s, the western bank industry interacted with insurance industry, as a result, bancassurance came into form. In our country, the cooperation between insurance company and finance institution such as bank began in the 1990's. Since 1999, bancassurance industry, which is one of the most important parts of assurance industry, has attained great achievement in China. Owing to the close-down of the domestic bancassurance industry for a long time, today domestic bancassurance industry is still in the principal-agency stage, which is the initial stage of bancassurance industry. At this stage, commercial banks sell assurance goods for inssurance companies. The relationship between the insurance company and the bank is a classical client-agent, and the relationship can be defined as a contract arrange from the point of economics, in which the client expects to stimulate the agent to work for his own benefit to achieve the largest utility, on the other hand, the client monitors the agent in order to prevent the agent from hurting the benefit of client. Because of the speciality of Chinese banks' developing and the low-level supervising of Chinese banks, there are so many problems in Chinese bancassurance cooperation, such as the misleading in principal-agency process and the inefficiency of supervising in banks. In view of the situation of domestic bancassurance industry, the author by introducing the game theory into the bancassurance practice, analyzes various equilibrium states of insurance company and the bank behaviors. On the base of much reading works and articles that refer to bancassurance industry, I will discuss these content as follows:1. First discuss the definition of bancassurance. Analyse the development of bancassurance industry in China and other countries and on the base of these I especially discuss the characteristics and essence of Chinese bancassurance industry. 2.Based on Information Unsymmetry Theory and Principal-agent Theory, analyse the Principal-agent relationship between assurance industry and the bank. Then discuss the bancassurance Principal-agent problems created by Information Unsymmetry.3. By introducing the game theory into the bancassurance practice, analysevarious equilibrium states between insurance company and the bank behaviors. Next build some game-models.4.Finally come up with some advices to solve domestic bancassurance Principal-agent problems in some aspects including reward, controlling power, fame and market-competing of agent.