China's Insurance Industry Market Structure And Firm Performance In Research

The opening process of China's insurance industry accelerated after joining WTO. As many insurance companies have been established, the market structure of insurance industry has changed a. lot. Foreign insurance companies were treated as chinese companies in 2006. However, the insurance market is still a typical oligopoly market with insufficient competitions in China, and the overall operating performance is not high, which affect the international competitiveness of China's insurance industry sevrely. Therefore, studying the relationship between China's insurance market structure and performance under such background, probing the causes of the inappropriate market structure and the low performance and proposing reasonable and feasible suggestions, are of great importance.This paper adopts the theory of industrial organization to analyze the market structure of insurance industry in China at first. The result shows that China's insurance market is typical oligarchic monopoly based on the collected numerous datas, but it also indicates that the market share and market concentration rate of the monopolistic power is declining. Then, DEA method and Malmquist index have been applied to analyze the static and dynamic efficiency of China's insurance companies respectively, and compare the changes of China's insurance market efficiency from 2001 to 2008. It is showed that the operating efficiency of Chinese insurance companies tends to improve in a whole scale, and the overall efficiency stands in a high level. Whereas the efficiency of joint ventures is relativley low due to the late establishment and still in'running in period'. At last, this paper adopts the theory of industrial organization and combines the present situation of China's insurance industry to structure a program of market performance, structure and efficiency, applies Eviews6.0 to do the empirical research on the relationships among market structure, efficiency and performance, and reaches the conclusion that neither the traditional collusion hypothesis nor the effective structure hypothesis exists in China's insurance market.