Financial Knowledge,Liquidity Constraints And Household Demand For Commercial Insurance

With the improvement of people's living standard,the risk management and wealth management of insurance will play an increasingly important role for family.On the other hand,most families in China have not realized the importance of commercial insurance,and there is still a significant shortage of demand for commercial insurance.In 2013,the proportion of households buying commercial insurance in China was only 18.41%,and the proportion of commercial endowment insurance and commercial property insurance was less than 3%and 1%.The current situation of low demand for commercial insurance is not only unfavorable for our families to enhance their risk protection capabilities and wealth management capabilities,but also is not conducive to the development of China's insurance industry.Therefore,taking the micro-unit of the family as the research object,it is particularly important to study the factors affecting the household demand for commercial insurance in China,and to seek ways to improve the household demand for commercial insuranceThe fundamental reason for the low purchasing willingness of residents'insurance in China is that the insurance awareness is weak,and there is a big deviation in the understanding of the nature of insurance.The understanding of the nature of insurance requires a certain degree of professionalism.Therefore,this paper chooses"financial knowledge"as an entry point to explore whether families will have more insurance consumption when they have a wealth of financial knowledge.In addition,some scholars have found that the existence of liquidity constraints will affect the choice of household asset allocation.But as an indispensable part of family configurable assets,there is little literature on the relationship between liquidity constraints and insurance asset allocation,that is to say study whether the family's liquidity constraints will affect their insurance needs.And this is another entry point for this article.To this end,this paper uses the survey data of more than 28,000 families in CHFS2013,setting up Probit and Tobit models to empirically analyze the relationship between financial knowledge,liquidity constraints and household demand for commercial insurance.Firstly,the article uses whether the family holds commercial insurance as an explanatory variable,and uses the Probit model to analyze the impact of financial knowledge and liquidity constraints on the possibility of household participation in commercial insurance.Secondly,the article regards the premium expenditure of household commercial insurance as the explanatory variable.The Tobit model is used to analyze the impact of financial knowledge and liquidity constraints on the degree of household commercial insurance participation.Finally,this paper compares the household life insurance demand with the endowment insurance demand to analyze whether there are structural differences in household commercial insurance demand.In addition,in the process of empirical analysis,considering the interaction between financial knowledge and commercial insurance demand,the construction of financial knowledge variables may also be biased.The article conducts endogeneity tests on all models and the sample data is inhabited.Grouping the community,age,and education level,using the average financial knowledge level of other families in the group as a tool variable,using the Ivprobit model and the Ivtobit model for two-stage estimation,and revisiting the impact of financial knowledge and liquidity constraints on household commercial insurance demand.The empirical results show that:(1)there is a positive correlation between financial knowledge and household demand for commercial insurance.The more financial knowledge,the greater the demand for commercial insurance;(2)the negative correlation between liquidity constraints and household demand for commercial insurance.Households with liquidity constraints will reduce the consumption of commercial insurance;(3)There is no obvious interaction between financial knowledge and liquidity constraints,and these two characteristics will not affect the effects when they exist alone;(4)Financial knowledge promotes both commercial life insurance and commercial endowment insurance purchases,and financially knowledge-rich households have greater demand for commercial life insurance;(5)Households with liquidity constraints will curb their commercial life insurance demand,but have little effect on commercial endowment insurance demand.Based on the conclusions,this paper proposes policy recommendations from both the government and insurance companies,including government departments should popularize financial knowledge,strengthen insurance education,and further promote the development of "inclusive finance".Insurance companies should also strengthen insurance promotion and promotion,focus on the construction of marketing teams and promote the innovation of insurance products and service.