Comparative Study On The Personal Life Insurance Demand Between Eastern And Western Regions In China

Chinese opening and reforming policies and economic development have urged the insurance industry. Life insurance has been developing rapidly. More and more life insurance companies are coming into being and expanding their business increasingly. Various insurance products have been created. Life insurance is playing important roles in the national economic and social development. However, there appear two problems during the rapid development. The one is insufficient demand in life insurance among households; the other is large regional disparities. By using panel data from 2000 to 2004 covering 11 provinces respectfully in both eastern and western regions in China, this study employs such factors as income, cultural awareness, household savings, supporting rate of dependents to do empirical analysis. The findings show that: in the Eastern areas per capita GDP is the key factor affecting the people's demand for life insurance, both the supporting rate of the elder dependents and education level are another two major factors. The main reasons are the higher income of residents in the eastern region, leads to their stronger affordability, and larger marginal propensity of consumption. Large eastern residents are better educated, which changed their attitudes to the life insurance. While in the Western areas, the most significant factors are the supporting rate of elder dependents, the government expenditures of social relieves, and the household savings amounts, per capita GDP, however, hasn't obvious influence on the people's demand for life insurance. The economy and cultural backwardness are the most fundamental factors, which leading to the development of the western region personal life weaker.This thesis puts forward some policy suggestions. First, improve per capita GDP growth to enhance people's consumption capacity. Second, strengthen public education to raise awareness of insurance. Third, create and improve the life insurance products and services, to encourage the potential life insurance demand. Fourth, strengthen and improve the credit system construction. Finally, guide and regulate life insurance companies.