An Empirical Study Of The Impact Of Risk Attitude On Commercial Insurance Demand

Since the open reformation,China's commercial insurance market have been developed rapidly for more than 30 years.As a basic tool of wealth management and risk management,commercial insurance is very important for residents.However,compared with developed countries,China's insurance market participation still needs to be improved.In this case,there are more and more theoretical and empirical studies on the demand for commercial insurance.Risk attitude is deeply influenced on purchase decision and investment decision.Because of lacking microdata in China,there are few empirical studies on the demand for commercial insurance.How risk attitude influence commercial insurance demand still remains controversial in the academic circles.This paper would like to explore the impact of residents' risk attitudes on commercial insurance choices and premiums.This paper try to explain why scholars' research results are different.This paper constructed empirical model of the impact of risk attitude on commercial insurance demand under three different measurement indicators,which is frequently used in the existing literature to indicate risk attitude.The three measurement indicators include: using alternative factors to measure risk attitude,using individual risk assets to measure risk attitude,and directly measuring risk attitude through design questionnaires.The data used in this paper is China Family Panel Studies 2014 panel data.This paper construct three indicators of risk attitude.They are health related behaviors(smoking,drinking,exercise),financial liabilities other than mortgages,and family subjective risk attitudes.This paper is trying to explore its impact on the purchase and premium of family commercial insurance.The empirical results show that risk appetite measured by health behavior significantly reduce the demand for commercial insurance,and have no significant impact on premiums.The risk attitude measured by financial liability behavior and subjective risk appetitie significantly increases the demand for commercial insurance and premiums.The inconsistent empirical results of this paper just verify the current debates among scholars in this field.This paper proposes several possible explanation reasons and provides support for subsequent research.This paper believes that the inconsistent empirical results may have the following reasons: the risk attitude measurement indicator may not be applicable to China's,the content of commercial insurance needs further subdivision,and the way risk attitude influence commercial insurance's demand is complex.The research in this paper helps scholars to find more effective indicator in China's conditions in the future research to indicate risk attitude,and also attracts scholars to pay more attention to the needs of commercial insurance for people in different insurance markets and different risk attitudes.