Structure Conduct And Performance Of China Life Insurance Industry

The paper focuses on the structure, conduct and performance paradigm of China's life insurance industry during 2001 to 2006, and is in the aim of providing academic support and advice for the improvement of the industrial organization. Theoretical and empirical study, as well as qualitative and quantitative analysis, is performed here to reach some conclusions as follow:Market entities are increasing, and the concentration is decreasing in recent years. However, China's life insurance industry is still a highly oligopolistic market. The main barrier to entry is the policy and related rules of law. This kind of market structure is apt to distort the competition.Product innovation and marketing of life insurance industry are important to the development of the industry. The conducts of the market are improving under the supervision of regulatory authority. However we need to create an appropriate environment of competition rather than the lag of rules and regulations.As for the performance, the financial data is unstable, while the technical efficiency, pure technical productive efficiency and the scale efficiency are improving, and company with great market power is probably in decreasing RTS.Some relationships between the market structure and performance are found here. The profitability is positive correlated to the market power, while the technical efficiency, pure technical productive efficiency and the scale efficiency are not significant correlated to the market power. So the company with great market power will result in high profit, but seldom in scale efficiency.