Empirical Analysis On Corporate Demand For Property Insurance

Risk prevention has become an important problem during the development of modern enterprises.Property insurance is one of the most effective means to manage and transfer risks.By participating in the property insurance,the insured enterprises and other economic organizations can get financial compensation timely to ensure the normal production and operation when enterprises are subjected to natural disasters or operation accidents.Since 90s last century,China's total economic output and fixed asset have grown a lot.This means insurable targets also have increased a lot.However,enterprise property insurance scale does not have a substantial increase.Its growth rate is declining during recent years.Moreover,the share of enterprise property insurance in property insurance is declining.This is mainly related to the lack of effective demand of enterprise property insurance.This paper research what effects the demand of enterprise property insurance.Traditional risk aversion theory and modern corporate finance theory distribute to the demand of enterprise property insurance.Based on the theoretical experience,this paper puts forward the basic assumptions of the research.This paper assumes that the demand of risk aversion,financing,tax avoidance and the demand to avoid the liquidity risk,Income risk make contributions to the demand of enterprise property insurance.This paper constructs a demand model of enterprise property insurance by using the data of non-financial companies from year 2008 to year 2015.The empirical results show that risk aversion demand,financing demand and tax avoidance demand contribute to the demand of enterprise property insurance.The demand to avoid the liquidity risk and the demand to avoid Income risk do not make contributions to the demand of enterprise property insurance.This paper research what effects the demand of the state-owned enterprises and non-state-owned enterprises enterprise property insurance demand.This paper finds that the risk aversion demand,financing demand and tax avoidance demand of state-owned enterprises contribute to the demand of enterprise property insurance.Moreover,the demand of liquidity risk avoidance also make great contributions to the demand of state-owned enterprise property insurance.Financing motivation,motivation,tax avoidance motivation and avoid liquidity risk avoiding traditional risk of state owned enterprises is more clear,and the influence of the scale of enterprises,Incomes accounted for is not obvious.For non-state-owned enterprises,the traditional risk aversion motivation,Financing Motivation and tax avoidance motivation of non-state-owned enterprises are obvious.The influencing factors of enterprise scale are also obvious.And the motivation to avoid liquidity risk and Income motivation is not obvious.Overall,the state-owned enterprises and non-state-owned enterprises in the property insurance demand from traditional risk aversion motivation,Financing Motivation and tax avoidance motivation,but the property insurance demand of state-owned enterprises but also from the liquidity risk aversion motivation.To further prove rationality of empirical models and empirical conclusions,this paper use the new variable to replace the original variables,the stability test,the results show that the explanatory variable whether the enterprise property insurance companies can better describe the demand,interest costs to reflect the financing needs of enterprises,the empirical model is robust and reliability.