| The development of life insurance is of increasing importance in the global economy. In 1979, China’s commercial insurance industry resumed. In 1982, the People’s Insurance Company of China (PICC) regained its business of life insurance, which was spun off in 1999. Since then, China’s life insurance industry has been well-developed, accompanied with a rapid growth in business scale, a better optimized market structure as well as significantly enhanced overall strength. Measured by life insurance premium, which has increased from the initial 1.59 million in 1982 to 919.1 billion in 2010, China has achieved a significant growth in the demand of life insurance during recent thirty years. On the one hand, life insurance demands have been stimulated by the accelerating process of China’s urbanization. On the other hand, the worse China’s aging population problem has become, the more people rely on life insurance.The development of life insurance industry in China is quite remarkable. There is, however, a certain gap between China and the developed countries such as America, Canada and Japan. With the problems of imperfect function of life insurance services and inter-regional imbalances among different provinces and cities, this paper attempted to study the factors affecting the demand for life insurance, so as to explore the characteristics of China’s life insurance needs.Related literatures have been reviewed. This paper selected relatively comprehensive panel data of 30 provinces and cities from the duration of 2000 to 2011. Disposable income, life expectancy, dependency ratio, saving deposit, education level, social security expenditure and the development of insurance intermediary market were discussed as influencing factors on the demand for life insurance. In the further empirical analysis, suitable models were established using Ordinary Least Squares (OLS) and Generalized Method of Moments (GMM), which captured the relationships between these influencing factors and life insurance demands in China. The study results proved that GDP is the largest driver of life insurance demands. Overall growth in the economy means more need for life insurance. Mortality rate is also a major factor that impacts the demand for life insurance. The higher the mortality rate is, the more demands there will be. There is a negative correlation between the dependency ratio and the demand of life insurance. Social security expenditure serves a dual function:it could be both a help and a hindrance in the effect on life insurance demands. In addition, the level of education and the development of insurance intermediary are both positive contributors to the life insurance demands.According to the results of empirical analysis, this paper puts forward the following suggestions:Developing the Midwest economy and promoting regional economic development; Orienting the proper position of life insurance industry, extensively advocating the advantages of life insurance, and vigorously encouraging the product innovation; Putting more emphasis on education and improving people’s insurance consciousness; Perfecting social security system as well as improving the level of social security in order to make social security and the life insurance built upon each other; Expanding life insurance coverage into rural and less developed areas and trying to narrow the gap between urban and rural areas in their access to life insurance services; Making more strides in developing the insurance intermediary market and deepening the structural adjustment so that the intermediary market could be the pillar of life insurance. |
PDF Full Text Request