A Study On Efficiency And Its Influencing Factors Of Life Insurance Companies’ Fund Application In Our Country

With the ongoing development of insurance industry, more and more companies enter into the insurance market. At the end of 2014, there are 178 insurance incorporated companies and1585 subsidiaries across our country, which is increased by the number of 11 and 19 respectively compared with last year. The competition of insurance market becomes fiercer and fiercer and the traditional underwriting income is faced with a great impact. Therefore the insurance companies begin to adapt their management strategies and put more emphasis on the impact of investment income on the normal operation than before, gradually resulting in the “two-legs”situation, operation with underwriting and investment. Thus the environment and statue quo of fund application, companies’ capacity of fund allocation, the problem in the fund application in our insurance market call for a further study. This thesis tries to compare the difference between the varied companies’ efficiency of insurance fund application and explores the factors which influence efficiency of insurance fund application.Based on status quo of insurance fund application in our country, this thesis compares with circumstance of foreign insurance fund application and puts forward that there exists certain difference between our insurance fund and foreign developed insurance market on the investment proportion, payment term and structure. Based on the development degree of present insurance market, the author thinks that the insurance fund on the aspects mentioned above in our country needs to be improved in the future, which lays the realistic foundation for the later study. Besides by applying data envelopment analysis(DEA method), input oriented CCR model,BBC model and Malmquist index model, the thesis makes a classified evaluation of 42companies’ efficiency in our country’s life insurance market during 2009 to 2014. According to equity structure, market share, asset scale, the life insurance is classified into Chinese large-scale insurance company, medium-sized insurance company, small-sized insurance company and foreign insurance company to compare with. The author finds that in the life insurance company,the efficiency of insurance fund application in our country is relatively low. But the middle-sizedcompany is close to the efficient frontier and its pure technical efficiency and scale efficiency are relatively high. The large-scale company and the small-sized company follow and foreign company come to the last. What’s more, the total factor productivity of fund application in the whole industry grows relatively slow, but its internal growth logic is different.After evaluating the efficiency factors, this thesis analyzes the influencing factors of efficiency by using the Tobit model and finds efficiency of fund utilization of life insurance companies in our country are mainly and positively influenced by asset scale, equity structure,market share and staff quality without regard to asset management companies. Among these factors, staff quality has the strongest impact and then comes to the market share, equity structure and asset scale. What’s more, short-term investment proportion has a negative impact on the efficiency of fund utilization. In the consideration of asset management companies, staff quality and entrusted management asset have an positive impact on the efficiency of fund utilization while the short-term investment proportion and operating expense ratio have a negative impact. At last, according to the findings above, the thesis puts forward the life insurance companies need to improve on the aspects of talents reserve, company’s competitiveness, investment structure and company’s assets management level in order to promote the efficiency of fund utilization.