Econometrical Analysis Of The Influence Factors Of Chinese Insurance Industry Development

As a method of risk management, insurance plays an important role in benign development of national economy. However, China, in which insurance has enjoyed a large-scale popularization, still has a long way to go in becoming an insurance industry power. Chinese insurance industry development is not consistent with economic development. It seems that the premium income is huge, but the depth of the development is far from enough. From the data during 2006 to 2013, for the development of China’s insurance industry situation we can find that the premium kept increasing, insurance assets scale kept expanding, the main part of the insurance industry has increased, and market concentration has decreased. Overall favorable developments, but there are still many contradictions and problems, such as lack of innovation, lack credibility and so claims. As a result, having a better understanding of the influence factors of Chinese insurance industry development has become an urgent task based on Chinese conditions. By reviewing the domestic and overseas researches, we make clear the arguments and methods of this essay.In the domestic and overseas researches, influence factors of Chinese insurance industry development are diverse. I analyze the influence factors from the aspect of theory to support the selection of factor index. We make clear that the word ’insurance’ mentioned in this essay means commercial insurance in the narrow perspective. This kind of commercial insurance plays an important role in the progress of economic development and financial system. The development of Chinese insurance industry is influenced by the following four aspects:level of economic development, social and political system, policy and legal environment, social and cultural environment. These four aspects have different mechanisms. The possibility of combining the completed article, this article will be summarized as economic factors, social factors, institutional factors these three areas, then through a combination of normative analysis and quantitative analysis, individual factors and overall variety of factors combined to study. In this essay, preliminary selected economic factors:the per capita net income of rural households, urban residents’ disposable income, total fixed asset investment, the level of consumption, deposit interest rates, per capita gross domestic product (GDP), balance of savings deposits of urban and rural residents by the end of year, level of financial development (M2-GDP ratio); social factors:the level of social security (social security fund expenditures), child dependency ratio, the elderly dependency ratio, urbanization rate (the proportion of urban population to total population), the employment rate, mortality; institutional factors:Policy dummies.In order to analyze the factors of the Chinese insurance industry development, in this essay, I analyze the Chinese premium income from 1990 to 2013 and the factor index mentioned below by using R software. Stationarity test, granger causality test, cointegration test, and ridge regression method are used to find the final conclusion. The major factors which can influence Chinese premium income are per capita gross domestic product, per capita disposable income of urban households, the one-year deposit interest rate, children’s dependency ratio, elderly dependency ratio, urbanization rate, employment and policy virtual variables. Among them, the children’s dependency ratio and policy virtual variable are negative influence to premium income, other factors are positive influence; The elderly dependency ratio and the employment rate enjoy the largest influence degree; And the overall influence effect and various factors are basically show the same trend. At last, I provide following five advices for the development of Chinese insurance based on the conclusion. The insurance development is supposed to make contribution for livelihood of the people and society harmony construction. Insurance institutional innovation should be advocated and the insurance industry competitiveness should be increased; Local culture should be paid more attention and urbanization insurance should be innovated; Residents’ disposable income need to be increased and insurance purchasing power need to be improved; The structure of population need to be optimized and endowment insurance of commercial insurance need to be developed.There are two innovations of this paper:first, select the indicators to be simple and direct representative. For some documents, such as the amount of education funds, institutions relatively, which have no particular influence variables are abandon, but try to ensure that the selection point of view of comprehensive. Second, the analysis of an indicator selection process does not include all indicators in the final regression equation, but is screened out several factors that have a significant impact, for the final analysis. And ridge regression can better solve the multicollinearity of combining with the application to make the regression result more scientific.