Empirical Study On Relationship Between Operational Diversification And Performance Of Property Insurance Companies In Gansu

The insurance industry has started latten in Gansu province. As the increasing in insurance companies, the competition is severer and severer. All of these insurance companies have developed according to operational diversification. As general businesses, profit maximization is the pursuit of insurance companies. underwriting profit is the direct profit for property insurance at the provincial level. This paper studied the relationship between operational diversification and performance of property insurance companies in Gansu during the period of 2005-2009.My empirical analyses showed that there was a nonlinear relationship between product diversification and insurance's performance; and geographic diversification had a positive effect on insurance's performance. There was an interactive relationship between product diversification and geographic diversification, and had a negative effect on insurance's performance. The relationship between product diversification and insurance's performance was different as the degree of geographic diversification. By the conclusion, I said some advice to help the property insurance companies complete product diversification and geographic diversification strategies.