| Finance is the lifeblood of economic development. While the insurance industry, an important part of financial system, together with funds, banks and securities, constitute the four pillars of the modern financial system, which is closely related to the capital market and money market. Since December 11,2004, China has started to fully open the insurance industry to the world in accordance with the commitment to the WTO. During the past five years, it has been faced with the pressure from various aspects, especially from the worldwide economic recession resulted from the financial crisis that is triggered by the US subprime mortgage crisis in 2007. It is doubtful whether the insurance market has withstood the test of the market. This paper mainly analyzes the level of the technical efficiency of the foreign-funded or Chinese enterprises on the life insurance market during this period, explores the main restricting factors of operating with inefficiency, and searches for approaches to improve its efficiency, which is of great practical and theoretical significance.Based on the theory of the efficiency, the production theory as well as the economies of scale, this paper firstly reviews the development and current situation of the life insurance in China and summarizes the characteristics of its development in different periods. Secondly, it selects evaluating index from the analysis of the labor segment, capital segment and material investing segment of its operating process, measures the technical efficiency from 2005 to 2008 of the sample of 25 companies selected by employing SFA production function model, and analyzes the changes of the efficiency statistics after the full open of the insurance industry, particularly under the influence of the global financial crisis.This paper, adopting unempirical analysis, comes to conclusions as follows:①On the whole, during the observation period from 2005 to 2008, the value of technical efficiency of foreign life insurance companies were higher than that of the Chinese-funded life insurance companies and the average technical efficiency of the overall samples of that year, except in 2008 when the former was slightly lower than the latter.②The growth rate of the technical efficiency of the foreign life insurance companies is lower than that of the state-funded life insurance companies.③polarization is very serious in life insurance companies, regardless of whether foreign or Chinese funded companies, which is more prominent in large state-funded life insurance companies④Foreign life insurance companies are weaker to withstand the financial crisis.⑤Small and medium-sized state-owned life insurance companies develop steadily. Finally, the paper puts forward proposals and measures to improve the efficiency of China's life insurance industries from various sectors such as labor, capital, material input and from different angles like Chinese life insurance companies as well as the foreign life insurance companies on the basis of the results of empirical analysis and the current status of the world's life insurance market. |
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