Influence Of Household Characteristics And Region Difference On Commercial Personal Insurance

Since the restoration of personal insurance business in China in 1982,the personal insurance industry has developed rapidly.However,compared with the developed countries,China’s personal insurance industry is still in the initial stage of development.In order to promote the rapid and healthy development of China’s insurance industry,we should further analyze the influencing factors of insurance demand.On the one hand,there is a difference in demand for commercial personal insurance for each family because of differences in family characteristics such as age,level of education,nature of Hukou,degree of risk aversion,income,and household asset allocation.On the other hand,Provinces and cities that families belong to also differ in terms of economic growth,residents’ spending power and the market’s ability to provide insurance products and services.These regional differences will directly or indirectly affect he demand for commercial personal insurance indirectly through influencing family characteristics.Based on the above background,this paper will use the stratified linear model to simultaneously analyze the micro-data of the China Family Financial Survey(CHFS)and the macro-data of the National Bureau of Statistics.First,using the regression of family-dependent variables as the first-level equation,the Intercepts and slopes in the equation are interpreted as layer 2 variables and are again regressed using variables that reflect regional differences(including per capita GDP,CPI,and number of life insurers,etc.)as a second-level equation to analyze how do the variables at different levels impact on demand of commercial personal insurance.The main conclusions of this paper are as follows:(1)The more risk-averse or more asset-backed families,the less willing to buy commercial life insurance,indicating that residents in our country are misunderstood about insurance products and the extent of their own risk exposure.(2)Among the differences in family characteristics(such as age,educational attainment,nature of Hukou,income,asset allocation,etc.),education attainment and the nature of Hukou have a greater impact on the demand for commercial personal insurance,accounting for approximately 12.97%and 12.62%respectively.Therefore,in order to further enhance the demand for commercial life insurance,working start from popularizing financial knowledge and developing insurance suitable for rural residents is more efficient.(3)In the economically developed provinces and cities,the demand for commercial life insurance is more sensitive to the differences in family characteristics;Besides,the more personal insurance companies in the provinces and cities,the demand for commercial life insurance is less sensitive to the differences of household asset allocation and the extent of social insurance coverage.(4)The demand of commercial life insurance is in an inverted "U" relationship with the increase of the average age of the family,but there is no inverted "U" relationship with the total family income.The higher the income,the greater the demand for commercial life insurance,which means currently our insurance products can meet the needs of high-net-worth customers.(5)The impact of inflation on the demand for commercial life insurance is insignificant.Combined with the current situation of China’s personal insurance demand and the conclusion of the study,this paper puts forward some policy recommendations such as increasing the setting of insurance institutions in rural areas,developing insurance products suitable for rural residents and improving the targeting of insurance products,increasing publicity of insurance knowledge as well as risk management knowledge.