Research On The Market Performance Of Chinese Property Insurance Industry

China resumed domestic property insurance industry since 1980. Since our country's reform and opening up in 1978, along with the rapid growth of our national economic, the opening up process of our national property insurance industry gradually speeded up. Especially, after China entered WTO, the number and scale of our national property insurance industry keep increasing. So far, there are 55 insurance companies in national insurance market, the insurance premium income also creates new record. Compared to 1980, our national property insurance market keeps strong growth speed, now market order have gradually been improved, both market concentration and market barriers have been lowered, market scale and service level have also made great progress. In short, Chinese property insurance market has made great achievement in recent years. However, although the market share of the three main national insurance companies (the PICC property insurance, CPPIC and Ping an P&C insurance ) decline each year, compare to the world wide insurance market level, the concentration of Chinese property insurance market still stays in a high level. So Chinese insurance market shows obvious monopoly characteristics, which directly leads national property insurance market to insufficient competition. What's more, the whole operating level of our national property insurance companies is not so high, market lacks benefit insurance types and innovation, all those influences Chinese property insurance market efficiency to some extent. So, through analyzing the Chinese property insurance market structure and insurance companies'operating status to study the market efficiency, have important theory and reality significance on enhancing Chinese property insurance industry's competitiveness, and promoting further development of Chinese property insurance industry.My essay based on the industrial organization theory, used the SCP analysis framework, to evaluate the Chinese property insurance market efficiency. We begin from the market efficiency theory, reviewed relevant domestic and foreign research literature, selected and organized 30 representative Chinese insurance companies'data from 2005 to 2009. The sample included 20 Chinese funded property insurance companies and 10 foreign funded property insurance companies. The essay analyzes recent insurance market structure status from the industry level, and used the DEA analysis method to evaluate property insurance companies'technical and scale efficiency from the micro level. Then, through set up Panel Data regression model to study factors like market structure, market structure and company efficiency's influence on Chinese property insurance market efficiency. What's more, this essay also compared the two aspects of Chinese insurance penetration and insurance density with developed countries, to explore the underlying reason of our property insurance market's low efficiency, and give out reasonable policy recommendations. The recommendations will provide theoretical basis and reference for optimizing our insurance market structure, regulating market behavior and enhancing Chinese property insurance market efficiency.The empirical conclusion improved that, Chinese property insurance market don't apply to the two main hypotheses (conspiracy hypothesis and efficient structure hypothesis) of industrial organization theory's establishment conditions. The high concentration of Chinese property insurance market don't match the market efficiency, so reduce the concentration level of property insurance market will help to improve insurance market efficiency. What's more, the whole profitability of property insurance industry is low, which means that our insurance market is on a low scale economic level. Finally, based on empirical study, our essay aimed to the actual status of Chinese property insurance industry, give out policy recommendations about how to enhance insurance market efficiency. That is, we need to introduce new property insurance companies which have high quality, through increase the number of companies on insurance market to bring the insurance market concentration down, and then the level of market efficiency can be enhanced. The already existing property insurance companies in market should focus on enhancing technical efficiency and innovative ability, but not expand business scale blindly.