Analysis Of The Economics Of Agent Dishonesty

Individual agent of life insurance (LI) is a kind of insurance agents. At present, it dominates the agent market of life insurance in the mainland. With its particular market functions, LI individual agents has greatly contributed to the prosperity of the life insurance market. However, as the market further develops, some individual agents' behaviors have been discovered to be harmful to the developments of life insurance market, among which moral crisis is especially serious and has drawn great attention in the society. The misguiding, and sometimes being cheating, has caused applicants' for insurance discontentment and criticism from the public. It has become a prominent issue that hinders the insurance industry from developing continuously and healthily. Based on the new institution economics and game theory, this paper has studied the moral crisis of LI individual agents in the mainland through the methodologies of comparative analysis and empirical analysis. Reasons of the moral crisis of LI individual agents have been elaborated from two viewpoints, i.e. formal and informal constraints respectively, the discrepancies of formal constraints such as salary assignment system, training system and qualified identification system have been explored firstly, and then some deeper reasons originated from those informal constraints such as culture, religion belief, contractual concepts, individualism and collectivism etc. have been analyzed. Furthermore, we have constructed a game model to analyze LI individual agents' immoral behaviors.Based on the above analyses, some conclusions and suggestions can be made to improve on LI individual agents. As for the formal constraints, LI companies should reform the present salary assignment system as soon as possible. In the performance assessment, insurance companies not only should check the number of policies, but should examine the qualities of those slips as well. During the route training, LI companies should make more efforts to mold the truthful characters in each individual agent besides marketing skills. During the qualified identification, companies should design discriminable systems according to the complexity of different policies. As for the informal constraints, it is necessary to advocate credit among LI industries as well as to establish the concept of' keep faith being honorable, breaking faith being blameful'.As a word, to effect a radical cure to the moral crisis of LI individual agent, we should depend on of the improvements in the formal and informal constraints and two sides should be made enough attention. Thus a good reputation and a sound development in LI industries may be able to be realized eventually.