Innovation On Agricultural Insurance Administrative Organization Base On Information Asymmetry

Insurance is an important risk management tool which can effectively disperse risks in time and space. But the natural quality of agriculture risk and the positive externality and quasi-public goods characteristics of agricultural insurance are most likely to change the agricultural insurance business mathematical basis, which led to the agricultural insurance market into shrinkage. Based on systematical analysis agricultural insurance market failure and logical reasons for the process: information asymmetry -- information costs -- adverse selection and moral hazard -- high-risk, high-premium, high-damages, low-supply -- market failure, the author finds that"innovation on agricultural insurance administrative organization base on information asymmetry"is the key to solve the market failure, so this paper choose this area as the research subject.In this paper, combining theory and facts, as well as theoretical and practical, the author adopts system analysis method to do the studies.This paper begins with reviewing the present situation, analyzing the market and risk characteristics existed in agriculture insurance which change the agricultural insurance business mathematical basis and pointing out that it can not be purely from the demand point of view solve the problems and need supply innovation. Further, the article analyzes the reasons of market shrinkage and made a "the key to supply innovation is reduce information costs " basic judgment; On this basis, the article points out that China should actively explore the" mutual system of insurance "and" Bancassurance (cooperation between mutual insurance company and banks) ", because they have comparative advantage in reducing information costs; then point out the future researches in combination with Bancassurance practice.The paper argues that mutual system insurance can produce a sufficient information sharing system, enlarge information sources channels, enhance information transmitting efficiency and enrich organizational interior information. Thus, it is propitious to information distribution. The cooperation between financial organizations such as banks and agricultural insurance organization on mutual system is beneficial for sufficiently utilizing information on both sides, promoting efficiency of agricultural insurance information utilization, which could be the main marketing channel for agricultural insuranceBut the article pays less attention on the implementation details of Bancassurance, which needs further study.