Study On The Demand And Supply Of Reinsurance In China

Reinsurance as the insurance for insurer plays an important role in stabilizing insurer's management and promoting insurance industry's developing healthily. With both qualitative analysis and quantitative analysis, the paper analyzes the factors affecting the insurance company's demand for reinsurance in detail: premium income, approval risk, capacity, underwriting profit margin, investment profit margin and tax rate, and by use of econometrical method builds up the logarithm regression model of property-insurer and life-insurer's demand for reinsurance. By demonstration, premium income is plus-correlative with insurer's demand for reinsurance, underwriting profit margin is minus-correlative with property-insurer's, and reinsurance is the necessary of insurers in China. Through analyzing the actuality and trend of insurance market in China, finds the gross premium will continue increasing and average underwriting profit margin will drop. Hereby, gets the conclusion Chinese market demand for reinsurance will be increasing in future. Then, the paper establishes the linear models of property and life market's demand for reinsurance using insurance market's data in 1993-2006.Secondly, through analyzing the factors affecting supply of reinsurance (number and supply bodies, capacity and policies), the supply of reinsurance in China is analyzed. The paper finds the quantity of national supply body is limited and the supply ability is also limited by insufficiency capital. So increasing quantity of supply body is imperative. But after analyzing the entry barrier, finds that the barrier is high for investors domestic.At last, aiming at the actuality of demand and supply in China, points out four key problems our country should solve in reinsurance market: problem of market structure rationalization, problem of commercial premium outflow, problem of cooperation and competition, the problem of disaster risk dispersing. Referencing from the development of international reinsurance market, the paper gives several suggestions.