The Failure Of The Personal Insurance Market In Shanghai And The Countermeasure Analysis

With the development of Chinese economy, the financial industry becomes more and more important in our society. As main contents of financial industry, personal insurance becomes more and more important in accelerating economic development and stabilizing society. At the same time, because of the special development courses and the industry's characteristic, Chinese personal insurance revolution lacks effective measures and there are many structural problems in personal insurance market. The market is monopolized by several big companies and they occupied the majority of the market. It is too difficult for other companies to enter the market. The system can not afford good environment for financing. There are not enough effective rules to regulate the exit action of the companies in this market. Further more, the history for personal insurance developmentin China is no more than 30 years. Chinese personal insurance industry can not match with foreign one in many aspects such as enterprise scale, management, experts, technique, products category, financing etc. All of these problems are mitigated the active social function of personal insurance.The deficiency of the market structure brought negative effect on market subjects' behavior and their performance. The companies do not attach enough importance to advantages such as innovation, product differentia, non-price competence and advertising. They will be more inclined to use unfair ways in market competition. The development of personal insurance industry in Shanhai can not catch up with the development of the whole financial industry.The personal insurance industry in Shanghai is keep ahead in China. But to comprise with other countries' industry, there are still big gap between them. The market structure of Shanghai personal insurance industry has many problems for some historical and existing factors. The problems of unefficient and nonstandard competition bring up bad impact on the development of personal insurance.Based on the history of Shanghai personal insurance industry, this paper analyzes this market by using the Failure of Market Theory in Micro-Economics and studying SCP Model. By combine these three factors, this paper brings out the theory structure andgeneral rules for analyzing Shanghai's personal insurance market. By using these theory and rules, this paper analyzing this personal insurance market and then give out counter-measures for reference.The contribution of this paper is deeply analyzing the economic reason of nonstandard development in personal insurance market but not sticking on the importance of market supervision in management.Further more, the researches for personal insurance market in present are less of systematic and most of the researches are focus on insurance industry but aim at personal insurance. Actually, property insurance and personal insurance are difference in many ways and it is necessary to research their markets respectively.