The Effect Of Xin Jiang Insurance Development On Economic Growth

As a financial kind,Insurance plays an important role in social life. Xinjianginsurance has developed rapidly since the resumption of business in1980, Xinjianginsurance has developed along with Xinjiang’s economic growth, so we can refer thatif insurance development can promote economic growth. Proper evaluation of theeffect of Xinjiang insurance development on the Xinjiang’ s economic growth has aposotive effect to make right insurances to improve the Xinjiang’ s insurancedevelopment.The role of financial development on economic growth have long been a concernof scholars, Schumpeter (1912) referred that developed financial system could reducetransaction costs, information costs and contributed to the promotion of economicgrowth. Since then, the relevant theoretical and empirical research emerged in largenumbers, scholars have do extensive and in-depth research from different angles andusing different research methods on this issue,. Unfortunately, the domestic andinternational point of views in this area focu on the relationship between banking andeconomic growth, research on the relationship between insurance and economicgrowth are rare. On one hang Insurance has the general function of the finance, it cancollect a lot of money to invest, so it can increase the level of investment in thecommunity; on the other hand, the insurance has its own specialty, it plays thefunction of the risk compensation to investment and consumption in the society andindirectly effects the economic growth. This paper selects the data of2005-2011Xinjiang quarter premium income, gross domestic product (GDP), the rate ofinvestment and consumption rates to establish an empirical model system to study theeffect of Xinjiang insurance development on economic growth. The study showed thatthe development of Xinjiang insurance can promote Xinjiang economic growth. Butthe empirical results show that insurance can contribute to the improvement ofXinjiang’s consumption rate, but its effect on increasing the rate of investmentchannels is limited.