The Study Of Individual Agent System Innovation In China

In1992, as the AIA Shanghai branch established in Mainland of China, theintroduction of individual agent system has broken the traditional individual life insurancemarketing mode and becomes the power of life insurance’s growth. Life insurance industrybegan to enter a period of leaping development period, and becomes one of the fastestgrowing industries in national economy. But several years after the introduction of thissystem, some problems gradually come out. The individual agent system introduced abroadis not harmonious with the current domestic financial marketing environment and theregulatory environment. Individual agent system need a innovation urgently, and it willchoose a way with Chinese characteristics.In the individual agent system, there is a principal-agent relationship betweenindividual agents and insurance company. The information asymmetry and the benefitasymmetry between life insurance company and individual agents enable individual agents’action can not consistent with the life insurance company’s benefit, and then cause the riskof principal-agent. We solve the risk of principal-agent through the incentive and constraintmechanism, but the incentive and constraint mechanism in the individual agent system ofour country has defects and then has caused a series of problems, such as unfaithfulness,agents recruitment, bad reputation, low quality of service and so on. Therefore, in order tomaintain the healthy and stable development of the life insurance industry, it is necessaryto reform and perfect individual agent system. For this purpose, this paper analyzes theChinese insurance industry and the defects of the individual agent system. Take Ainsurance company Suzhou center branch as investigation object, I track the effectivenessof A company’s new individual agent system for a year. Then I study the excellence offoreign life insurance individual agent systems and put forward the reform andimprovement suggestions.