Research On The Market Structure Of Insurance Industry In China

This abstract focuses on the market structure and optimisation of the insurance industry in China. We will provide a frame of industry organization in our analysis. By using comparison, demonstration, and conclusion, we have suggested some improvements to the market optimisation through the use of theoretical and practical theories.The first and introductory chapter provides the background, direction and methodology of the research. In the second chapter, we will briefly discuss about the theories of the market structures found in and outside China. The third till the fifth chapters looks in detail at the insurance market structure from 3 directions; namely the market concentration view, product difference, entry and exit barriers. Using empirical analysis, we have the following conclusions on high market concentration, low level of product difference, high entry and exit barriers, showing the oligopolistic and non-oligopolistic market structure in the industry. With references to the insurance structures and experience outside China, we derive steps and measures to further optimise the market structure and aims.One of the most notable characteristics of the insurance industry in China is the overly-high market concentration and the presence of governmental over-control, thus the market lacks healthy competition. In order to promote healthy competition, we need to create a competitive and yet oligopolistic atmosphere whereby big, medium and small scale industries co-exist. A moderate oligopoly creates a stable structure, and moderate competition provides a healthy and lively market. Therefore, we need to increase the competitiveness of large companies and at the same time provide a better atmosphere for smaller companies so as to improve the overall efficiency and competitive edge of the entire insurance industry.