Research On Development Evaluation Of Policy-oriented Agricultural Insurance

Agricultural production has natural weakness, facing dual natural and market risks, agricultural insurance can effectively disperse production risks and stabilize farmers’ income. Our policy-oriented agricultural insurance which relied on financial subsidies began in 2004, in 2007 central government started providing financial subsidies, since then agricultural insurance developed rapidly. Agricultural insurance companies increased rapidly, four specialized companies have been established and gradually launched business from established provinces to other places. But during this period,it had been exposed that few insurance companies obtained premium subsidies fraudulently and other similar issues. As the central government vigorously promote development of agricultural insurance, local governments have also promoted development of agricultural insurance according to local realities, Shanghai, Jilin, Heilongjiang, Anhui has set up four specialized companies of Anxin, Anhua, Sunlight, Guoyuan, and gradually developed modes of agricultural insurance suitable for their provincial realities. How the effect of these initiatives to promote the development of agricultural insurance is, how to value the development level of agricultural insurance of 31 provinces, how to quantify the influential factors of the provincial agricultural insurance development. It is significant to clarify these issues for comprehensively understanding agricultural insurance market. Because provincial agricultural insurance development is inseparable from exhibition industry of the insurance company, so before evaluating development level of provincial agricultural insurance, it is necessary to sort out the performance of agricultural insurance companies.Therefore, goals of this article includes, quantifying the evaluation of market performance of agricultural insurance companies and identifying differences of their financial performance; quantifying development level of agricultural insurance of the whole 31 provinces, then scoring and ranking, further more, analyzing influential factors to provincial agricultural insurance development, and putting forward policy recommendations. To achieve these goals, we use data from "China Insurance Yearbook" and official statistics, respectively, from insurance company and provincial district level, to analyze the supply market of agricultural insurance. First, introducing ROE calculation tree, classifying insurance companies, calculating their operating performance and investment performance of each category, identifying their competitive differences. Then, constructing Index System to measure development level of each province, then using multivariate statistical analysis to measure development level of agricultural insurance of each province, then scoring and ranking. Finally, building econometric model to quantify the level of influential factors to agricultural insurance development, drawing conclusions.The results show that under government financial support, there exists problems of poor investment performance and high dependence on financial subsidies for professional agricultural insurance companies, it is urgent to enhance their competitiveness. The ranking results of development level of the whole 31 provinces showed that for the front rankings there are several similarities: they earliest established specialized agricultural insurance companies in their provinces to launch business; financial support and subsidies level are higher; formed relatively mature development modes. Further quantitative analysis showed that establishing professional companies to launch business, high level of financial subsidies, early forming agricultural insurance modes are several factors promoting development of agricultural insurance significantly, the tertiary industry and agriculture, forestry, animal husbandry and fishery industry development also have some impact on the development of agricultural insurance.To further promote development of China’s agricultural insurance market, we put forward the following policy recommendations: For insurance companies, break the existing subsidies "one size fits all" situation, try to establish subsidized mechanism based on performance and subsidy funds monitoring mechanism. For provincial agricultural insurance, try to attract special insurance companies to launch business, enhance financial support and subsidies, develop model suitable for every province based on local conditions.