Study On The Efficiency Impact Of China’s Life Insurance Industry From Foreign Insurance Companies

Since the complete opening of China’s insurance industry, the market of China’s life insurance has become a paradise for foreign life insurers. The entry of foreign life insurers have positive promotion to China’s life insurance industry, bringing advanced managerial concepts, various products, marketing model and so forth. But they have bad effect to domestic life insurers based on technical skill, operating management. Meanwhile, they would challenge insurance regulatory agency. With the increase of foreign insurers, it is very necessary to study empirically the impact of China’s life insurance industry form foreign insurers. The existing literatures have not yet studied it a lot because of the late start of China’s life insurance industry, this article can not only fill this gap in research, but can also provide a comprehensive and accurate knowledge of the impact from foreign life insurers, provide some reform suggestions for foreign capital and some support for a steady-developed life insurance industryThis paper analyses the characteristics of the foreign life insurers. Combined with the practices, this paper illustrates both the positive and negative impact of the foreign life insurers Then a two-stage DEA model dealing with negative outputs is employed to measure the operating efficiency of32domestic and foreign companies. Based on it,a Tobit panel is used to analyze the efficiency impact of China’s life insurance industry form foreign insurers Throughout the study, the number of foreign life insurance companies and asset size have positive impact on China’s life insurance industry. Meanwhile, the foreign market share has less impact.This paper finally suggests that we should continue to reasonably open the life insurance market, improve supervision of life insurance industry, strengthen cooperation between foreign and domestic companies.