An Empirical Study On Efficiency Of Chinese Insurance Companies、Analysis Of The Influencing Factors And Improvement

China joined the World Trade Organization (WTO) in 2001.Under the rules of the WTO agreements regarding liberalization in financial service industries. With the stock reform of state insurance companies and the establishment of many commercial insurance companies as well as the entry of foreign companies, the competition environment of insurance market in China becomes more fierce. In order to deal with the hot competitions, insurance companies must improve their competitiveness. The key of core competitiveness is efficiency improvement. In the market economy, one of the essential rules is that only the competent ones can survive and those incompetent ones are about to eliminate through selection. Only the company that continues to strengthen its ability of cost control and profit creation can win in the market economy. Therefore, it is important academic and realistic meaning of that research the efficiency and its influencing factors of Chinese insurance companies.Taking the above issues into consideration, the author chooses to work no this topic—"An empirical study on efficiency of Chinese insurance companies、 analysis of the influencing factors and improvement ". After theoretically explaining the efficiency, the author use the data of major insurance companies in China from 2006 to 2010, calculates the efficiency scores of using data envelopment analysis (DEA) method and employs Tobit regression analysis to investigate the relationship between various firms characteristics and efficiency measures. Although the difference exists between the conclusion and reality, the paper tries to show us the trend and situation of the efficiency of the Chinese insurance companies.The paper consists of the following five chapters:Chapter 1:Introduction. It provides the general picture of this paper including background and significance of the theme, overseas and domestic literature review on the study of the efficiency of institution, research emphasis, empirical methods, detailed outline and framework.Chapter 2:Theory and measurement methodology of insurance firms’ efficiency. It summarizes the efficiency ideas, defines the various efficiencies of insurance firms and categories the theories of micro efficiency. Then this chapter explains the three principal types of efficiency estimation methodologies:financial ratio, parametric approach and nonparametric approach. Rations analysis is a relatively simple tool in assessing the financial condition of a firm. While frothier analysis techniques provide more comprehensive and reliable information. At last data envelopment analysis is used to analyze the efficiency of insurance company.Chapter 3:Empirical study on efficiency of the Chinese insurance company: data envelopment analysis application. It use a nonparametric frontier approach DEA to calculate efficiency scores of all Chinese insurance companies from 2006 to 2010. First, an overview of the three insurance industry used input and output defined: cost method, financial intermediaries and value increase in France. Taking into account the cost method is difficult to accurately measure the specificity of product revenues and opportunity costs, insurance products can not be a direct measure, and so will be integrated financial intermediaries law and the increase in the value of considered in the investment, the selection of output indicators, the establishment of the input-output index system based on the particularity of insurance products. Subsequently, based on input-oriented DEA method efficiency evaluation model of the insurance company, the use of existing data were measured efficiency values of 2006-2010 of 14 property insurance companies and 16 life insurance companies. Finally, the efficiency results of the assessment were analyzed.Chapter 4:The analysis of influencing factors of the efficiency of the Chinese insurance companies. By DEA estimates the efficiency is unable to find the factors that affect the efficiency of decision making units. Therefore, the overall size of the selected insurance company solvency and capital adequacy, capital utilization level, human capital, market structure, capital structure as explanatory variables, using Tobit regression analysis to the factors affecting the efficiency of Chinese insurance companies.Chapter 5:The reason of inefficiency of Chinese insurance company and the ways to promote the efficiency of the insurance company. Finally, according to the conclusions of the above analysis, it provides three measures to promote the efficiency of the Chinese insurance companies. They are:(1) optimization of China’s insurance market structure; (2) promote the development and innovation of our insurance products; (3) enhance our ability to use of insurance funds.