The Empirical Research Of Partial Equilibrium Method In Chinese Car Insurance Pricing

The car insurance is the common name of a number of insurance businesses, which take cars and its benefits as the subject matter insured. It has very important effect on stabilizing social production and life and promoting healthy development of the national economy. This text combines qualitative analysis with quantitative analysis and it uses the partial equilibrium method into Chinese car insurance pricing and does empirical analysis.Firstly, this text analyzes the current situation of Chinese car insurance. Our countries'insurance industry was resumed from 1980s.The car insurance develops at a very fast speed. The car insurance premium income in 2007 makes up 74.3% of property insurance premium income. But at current, the car insurance market is in the state of price cut-throat competition. So it is necessary to study car market of our country. Secondly, this text is on the theoretical basis of the partial equilibrium of Western Economics. It analyzes the factors such as the intension,influence factors and equilibrium state of Chinese car insurance demand and supply. The studies find that the national income,the car insurance rate levels,educational levels have great influence on the car insurance demand and supply. Thirdly, this text builds a microscopic theory model of the insurance demand and supply—the model of the relations between insurance demand,supply and income,premium rate,insurance premium. By means of econometrics method, it builds the car insurance demand and supply regression model and logarithm regression model of the national income,car insurance premium rates,the graduate number of common colleges and universities using the time series datum of motor vehicle insurance premium income and coverage,national income,the graduate number of common colleges and universities from 1985 to 2006.It forecasts the average premium rate of Chinese car insurance in 2007 is 0.011407.The average rate of Chinese car insurance market in 2006 is 0.0082.It is predicted that the average rate of Chinese car insurance market in 2007 is below 0.0082, which illustrates that cut-throat competition makes the average rate of Chinese car insurance market lower. On the other hand, the demonstration indicates: the income marginal propensities of Chinese car insurance demand and supply are separately 0.00377 and 0.002901.The national income elasticity of Chinese car insurance demand and supply are separately 1.480236 and 1.517905. The premium elasticity of supply is -0.672519.The demand and supply is flexible to the national income. The supply is inelastic to the car insurance premium rate. It shows that the economical development has great influence on our countries'car insurance.Finally, this text propose the demand promoting measures, which includes reinforcing insurance propaganda,striving for relative tax preference and expanding obligatory insurance timely. It also raises the supply pulling measures, which includes reinforcing the capital gross of insurance industry,raising the business efficiency and bringing forth new ideas of insurance productions and services.