On The Economic Effects Of China's Insurance Industry With A Comprehensive Range Of Business Models To Choose From

Being confronted with the poor situation in both domestic and abroad economicmarket, the Chinese insurance industry has gradually grown up with fluctuation. Theassets and scale of the industry have achieved considerable progress. The nationaleconomic plan was about to strengthen and develope the comprehensive operatingmodel which has already established in these years. While at the same time, someinternational financial groups have chose the professional business strategy, and theinsurance comprehensive operation has encountered obstacles and doubts in the world.So it makes us to re-examine the effect and adaptability of the scope economies ofinsurance comprehensive operation.First of all, from the transaction cost theory, customer relationship managementtheory and specific asset theory, this paper analyses the possibility and generatingmechanism of the scope economies, then clarify the connection and the mutualimpact between the scope economies and comprehensive operation. After anintroduction of the development history of the multy-operation in China and abroadthe article make an elaborate analysis and some comment on the current situation onit and an empirical analysis on the insurance scope economies. Combined with theformer results, the paper make a proper model for the insurance integrated operationand recommendations to improve it.The empirical results suggest that the insurance groups which adopt thecomprehensive operation in China still haven’t got the scale economic effect and thecompanies with the assets above the average show better effects than the others.What’s more, the property insurance shows best in the product-specific scaleeconomies effect, and the investment worst. The effect of life insurance is mediumand fluctuate much.According to the previous conclusion, the appropriate comprehensive operation has got the following aspects in common:1. Carry out a complete business in property insurance, investment and life insurancein order.2. Choose all kinds of business entering pattern such as conglomerate merger, newlyestablishment and contract cooperation, and extend the business development throughmulti-channels.3. Develop an appropriate business scale, diversify and enhance the businessvarieties.4. Get all the information, capital, labor resources fully used and synergetic, andmake an effective sharing mechanism in the enterprise or the whole industry.5. Improve the regulatory system to different kind of businesses and institution withdifferent condition to maintain a fair market environment.The group holding company model is effective and appropriate for thecomprehensive operation in current phase. As the scale economies haven’t reachedyet, it needs the whole industry to make it come true by establishing an effectiveinformation resource sharing platform, getting all the businesses (productiondevelopment, sales practices, services and settlement of claims) synergetic to makefull use of all the resources, controlling the scale of the salesman group, developinginnovated business channel.