Research On The Effects Of Urbanization Differences On Life Insurance Demand In China

Urbanization is the historical process which rural society based ontraditional agricultural gradually shift to modern urbanization societybased on industry and services. Urbanization is the remarkable feature ofChina’s economic and social development for the time being and China isnow in the stage of accelerated development of the urbanization, with oururbanization rate reached50%in2011. Premier Li Keqiang has pointedout that the urbanization was the maximum power for China’s economicdevelopment in the next ten years. In this context, as the increas ofurbanization population and income, concept change and the arrival of anaging population society, China’s life insurance industry will usher as inthe spring. But at the same time, the urbanization of our provincialurbanization differences are very obvious and the Chinese life insuranceindustry showed great imbalances.This research selects the life insurance company as the research pointof view and takes life insurance demand of different provinces as theresearch object. After making clear the theory and meaning of theurbanization and life insurance demand, this passage finds by qualitativeanalysis that the influence of urbanization differences on life insurancedemand is realized mainly through the population, economy, society andenvironment aspects of the urbanization. After collecting11data of31 provinces in China on the urbanization and the demand of life insurancefrom2006to2012, this passage simplifies10indexes of urbanizationsystem into one comprehensive score index firstly through factoranalysis.Then it investigates the influence of different provincialurbanization on life insurance demand through the panel data model.Through the test of significance, the31provinces (city, area) is dividedinto four echelon, the difference of urbanization which influences thedemand of life insurance in Beijing,Shanghai and other8provinces of thefirst echelon is the most significant, followed by Hebei, Zhejiang andother10provinces of second echelon, the influences are weakest butstill significant in Inner Mongolia, Xinjiang and other8provinces of thirdechelon, and there is not significant in Guangxi, Ningxia,Yunnan,Guizhou, Tibet and other5provinces of fourth echelon. Further more,this paper defines the the specific equation between different provincialurbanization and the demand for life insurance, and make concreteanalysis accordingly. Finally, this paper puts forward that in thebackground of our city differences,life insurance companies shouldadhere to the strategies that develop first echelon provinces firstly, layout,make an overall layout to seize market share in the second echelonprovinces,pay real-time attention and set up outlets in key areas in thethird echelon provinces and wait for proper opportunity in the fourthechelon provinces. At the same time, they also should make improvements in product design, marketing, service, industrial layout,construction of system.