A Research On The Correlation Between Market Structure And Performance Of Property Insurance In China

Since the property insurance industry recovered in1980,great changes have taken place in the insurance market.The number of insurance companies is on the rise. But the companies do not pay enough attention on the efficiency,and thus the comprehensive cost rate is too high.The correlation between industry structure and efficiency is to be analyzed.Basing on the existing market power hypothesis and efficient structure hypothesis,namely the SCP theory,the relative market power hypothesis,the efficiency structure hypothesis and the quiet life hypothesis,this paper builds a theoretical framework.Under the framework of industrial organization theory,it analyzes the correlation between structure and performance of property insurance industry in China, and decides what kind of hypothesis is to be adopted.The empirical study falls into two parts,one is the macro perspective-the industry level and the other one is the micro perspective-the company level.Using the time series of1999-2013,this paper adopts vector auto regression research methods.And in the second part,it uses the EMS software to calculate the efficiency value by DEA.Finally this paper makes these conclusions:firstly,with the increase of HHI,the insurance market concentration has strong positive influence on market performance ROP, whereas, the influence of ROP to market concentration is very weak.To some degree, this result accords with the SCP hypothesis.Secondly,on the company level, the overall property insurers market share has little influence on its performance.Ultimately,this paper puts forward some suggestions:the property insurance should introduce a variety of different companies;Besides, adequate policy support should be given to the small and medium-sized insurance companies;The blind pursue of high market share by high kickbacks is not allowed;The regulators should optimize he supervision mechanism and establish a market exit mechanism.