A Comparative Study On The Effective Demand Of China's Life Insurance

Since 1982 the State Council has authorized to restore the life insurance service, our country life insurance industry has obtained the development which progresses by leaps and bounds. However, since 1998, our country life insurance industry development obviously has slowed down, the life insurance effective demand insufficient contradiction highlights day after day, thoroughly studies the influence life insurance effective demand the factors, maintains regarding the our country life insurance effective demand,is continually fast, stably grows has the important theoretic and the practical significance.The structure of the paper on study the effective demand of china's life insurance company is as follows.In the first chapter we briefly reviewed the overseas life insurance demand theory from the seed to the development perfect process as well as the domestic life insurance demand theory development present situation.The theory of the demand of life insurance was founded in 1960s in outdoors. From the found it is related to the theory of consumptive behavior, especially to the research on the hypothesis of life cycle. The development of theory is along to two aspects. One is to investigated why and how to purchase of life insurance and annuities might reduce or absorb the uncertainty stemming from income stream so that people could optimize life cycle consumption ulility, the other is to research which factors influence the purchasing behavior under the optimal consumption in the life cycle and how to influence. The researchshow that some factors influence life insurance purchase decision. There are two stages of the research on the life insurance demand theory obviously in our country. Before the year of 2000, the research on life insurance was almost qualitative. From the year 2000, the research has been deepening. Some scholar intrduced the implement of econometrics model into their positive research.Until now the research on life insurance demand theory is few, which use qualitative and quantitative method, furthermore,the research on the models of life insurance demand are blank in our country.In the second chapter we carry on to the life insurance demand subdivided and produce the life insurance effective demand definition. We introduce the history and actuality of the effective demand and expound the process of life insurance in china and its fluctuation's reason.From the resume of life insurance operation in 1982, premium income of life insurance grows rapidly. There are some reasons for that. Firstly, the rapid development of economy from the reform accelerate.The economy are changing from single public-owned structure to the being of public-owned structure and other structures, and are changing from the planned economy to market economy. Secondly, the change of the economy system and structure make the risk highly. Thirdly the reform of the system of medical treatment and the system of social security bring the opportunity for the demand of life insurance.The gross population and the population structure in our courtry bring good opportunity.The change of the kind of life insurance greatly speed the effective demand of life insurance.While the development of the effective demand of life insurance is slow from 1998. There are some reasons of the phenomenon. The fall of the interest rate make the cost of lif insurance products high. The channel of investment was so limited and the investment return was very low, so the effective demand descended. Because of the long term and the concentrating characteristic of life insurance operating, the life insurance company arrive the balance point from the loss to the payoff. At the same time the furious rivalship, rake-off and the elevated cost of career make the life insurance operations shrink. The finance crisis of Southeast Asia made our courtry′s economy descend.The third part introduces some symbolic models.We use symbolic model to analyze the factors of life insurance, such as fortune, expection, self-insurance, inflation, population, etc.The fouth chapter is the quantitative analysis part. Firstly we introduce the factors selection particularly. We select premium income of life insurance to measure the gross demand of life insurance. We select GDP, deposit of citizen and country inhabitant, personal consume, consume price index from macroscopical factors and select gross population, the coefficient of the old, the depth of finance, social security welfarism, the depth of market, interest rate of one year deposit. In order to standardization, we deal with the data in uniform criterion. We tested the series smoothy using ADF so as to avoid false regression. Then we tested the long equilibria relation between the effective demand of life insurance and each factor using cointegration test. So we found there are the long equilibria relations between them.In order to test each factor whether is the Granger causality we must use bivariate Granger causality test.Afer the test we found each factor is the Granger causality of the effective demand of life insurance except social security welfarism.Then we establish Vector Error Correction model to analyze the influence to the effective demand of life insurance.In the last part we analyse the factors that influence the effective demand under economic frame and draw the conclusions. We find the positive relation between the effective demand and GDP, deposit of citizen and country inhabitant, personal consume. Furthermore, there are Stock-Watson common trends between the effective demand and the macroscopical factors. The gross population and the coefficient of the old have positive influence on the effective demand.The economic system and structure factors such as the depth of finance, the depth of market promote the effective demand development. Social security welfarism may have negative effect on life insurance demand according to the theory of life insurance demand outdoors and the positive research. But we find there are the Stock-Watson common trends between the demand and Social security welfarism. At same time Social security welfarism is not the Granger causality of the effective life insurance demand. Interest rate of one year deposit has negative influence on the effective demand. When the interest rate descends, the price of life insurance products descends, then the effective demand expands; otherwise, when the interest rate rises, the price of life insurance products rise, then the effective demand shrinks.