On The System Of The Supply Of Agricultural Insurance In China

Through 20 years' development,the insurance industry in our country has obtained remarkable achievement.By the end of 2004,the national premium has reached to 431.81 billion Yuan,which increases 11.3% compared with that in year 2003.However the agricultural insurance(AI) market is distinctly different,the premium in this market gets lower and lower.The premium from agricultural insurance in 2004 is only 0.377 billion Yuan,decreases 18.86% in comparison to the year 2003,and 21.46% in comparison to the year 2002.The premium of agriculture insurance only takes the proportion of 0.35% of the general insurance.The situation isn't optimistic. The author intends to make the research from the angle of supply,hoping to solve this problem through the realization of efficient supply in the market.The reasons are given as follows.First,the supply is one of the important factors that restrict the development of the agricultural insurance market.Second,our country will take the supply decided regime changes.Under that circumstances, the supply is controllable and adjustale,hence, we should pay more attention to it.Third,in reality,our country is undergoing the reform of agricultural insurance.The reform concentrates on finding appropriate supply forms.So developing the thesis from the supply has its realistic significance. This thesis is composed of the preface and four chapters.The background concerned,writing intention and the method of research is interpreted in the preface.In the following parts,the author discusses why we should build the AI supply system and how to achieve it.The four chapters are organized as follows: The first chapter analyses three of the most important factors that limit the supply of agricultural insurance: the system risk, the information asymmetry in agriculture and the nature that agricultural insurance is quasi-public commodity, Exactly, there are so many kinds of agricultural risks which take place frequently and widely that people in large area have to face the similar natural risk. These causes are connected closely. The system risk causes more loss and more cost of agricultural insurance. To solve this problem, the author refers to pure risk underwritten or reinsurance. In section two the information asymmetry in agricultural insurance is discussed. There are two forms of asymmetric information: "hidden information" and "hidden action", by which the"adverse selection" and the "moral hazard" are triggered. Consequently the transaction cost increases, which is hard for the insurer to cope with. As the solution of this problem,the author discusses the feasibility of mutual cooperative insurance organization in section three. Due to the AI is a kind of the quasi-public commodity, its social cost is higher than it private cost, thus the insurer would not supply. In the view of economists, the subsidy given by the governors can solve this problem. Chapter two analyzes the experience in some developed and developing countries. The AI experience in US, Canada, Japan, Germany, France, Mexico, Brazil have been introduced in the first part .Then some apocalypses are obtained, such as the important roles of AI ,perfecting legislation to ensure the AI business, defining the AI policy, funding the AI by government, and establishing a good AI system ,etc. Chapter three gives a brief review of the process of AI in China. The author departs this process into two stages. One is from 1982 to 2003 called quasi-commercial model. the other stage is after 2004,from which a lot of new companies have entered the AI market. Now the market structure has changed a lot.The fourth chapter is about how to construct the AI supply system in our country. We aim to build a system based on the mutual cooperative insurance organization. In this system, the policy insurance is the temporary part, the business insurance company is the complement, and the policy reinsurance company gives the high-level support. At last, the author discuss the conditions to establish this system. Though the AI is a hot topic at prese...