Research On Moral Hazard In Chinese Life Insurance Market

Chinese life insurance has been maintained a rapid growth momentum since1982, after its operation resumed. It’s premium income rose from1.59million yuan in1982to1.632trillion billion yuan in2010with an average annual growth by61.38%. Life insurance becomes one of the fastest growing industries in national economy, but worries booming. With the rising of the personal agent and bancassurance, moral hazard in the life insurance market has exposed, and become one of the main risk to concern. It’s not only the main consumers’ complaint, but also a key aspect in regular rectification of the insurance market the China Insurance Regulatory Commission focuses in recent years. However, moral hazard studies were focusing on the insurance consumers, not much on the life insurance market. The paper is to study the moral hazard in the life insurance market.What is the moral hazard? What moral hazard is there in life insurance market? What is the form? What are the characteristics and how it causes? The author is trying to settle the practical problems. In this paper, the author will introduce the theory of moral hazard, elaborate characteristics of Chinese life insurance business and sales, analyzed the status、 form、characteristics of moral hazard in Chinese life insurance market, and find out the root cause. The author will put forward a point of view that misguidance sales is prevalent in the industry and commercial bribery is emerging in recent years, a representative of moral hazard. This view will be a new angle for study in moral hazard in the life insurance market. In the last part of this paper, for preventing moral hazard, the author raises the specific and practical suggestions from the aspects:set up risk awareness, strengthen internal control, improve existing system, strengthen the construction of marketing channel by using latest IT support. In this paper, the author wants to promote healthy and orderly development of Chinese life insurance.