The Research On The Influence Of Supervision Factors On China's Motor Vehicle Insurance Underwriting Cycle

The underwriting cycle is a significant feature in the non-life insurance market,which is mainly used to describe the cyclical cycle of changes in the indicators such as the underwriting period,gross premium income or claims expenses of the property insurance market.Its specific performance is: dividing the market into two periods,which are firm market and weak market.When the market is the firm market,that is,the insurance demand in the market is greater than the insurance supply,the insurance company tightens the underwriting conditions,so it can obtain higher premiums and profits,and at the same time obtain a lower loss ratio,which attracts a large amount of capital to enter the insurance market,causing competition in the industry.Intensified,forcing insurance rates and underwriting standards to fall,so that insurance supply increased,gradually greater than insurance demand,and the market entered the weak market;when the market is in a weak period,the situation is reversed,the insurance demand in the market is less than the insurance supply,insurance companies relax the insurance conditions,so that the insurance rates and underwriting profit margins will fall to a lower level,and even negative cases may occur.As the underwriting conditions are relaxed,the insurance claims ratio will rise,resulting in a large amount of capital exiting the insurance market,and the insurance supply will decrease.Then the insurance market enters the weak market.Motor vehicle insurance is the leading insurance type of non-life insurance business in China.As of 2017,China's motor vehicle insurance premium income accounted for 76.48%of the total non-life insurance market premium income.Therefore,mastering the fluctuation law of China's motor vehicle insurance underwriting cycle plays a crucial role in promoting the entire non-life insurance market.Compared with foreign markets,China's motor vehicle insurance market has certain specialities and has certain administrative coercive colors.In the course of its development,it has been strictly regulated by the regulatory authorities,and many policies and regulations have been promulgated and implemented,which will inevitably affect the fluctuation of the underwriting cycle of China's motor vehicle insurance.Therefore,the research on the insurance cycle of motor vehicle insurance in China must take into account the regulatory factors,which is the focus of this paper.This paper sorts out the related literatures at home and abroad,and takes the lossratio data of China's motor vehicle insurance from 1985 to 2017 as the research object,and chooses the method suitable for China's national conditions to make research on the existence and supervision factors of China's motor vehicle insurance underwriting cycle.The specific research contents are as follows:Firstly,the relevant theories of the underwriting period are sorted out,and the methods of calculating the underwriting period and the methods of analyzing the supervisory factors are compared and analyzed.This paper chooses CF filter method as the underwriting period calculation method to prove the existence of insurance cycle phenomenon in China's motor vehicle insurance.From 1985 to 2017,it has experienced 5 insurance periods in the past 30 years,and there are differences in fluctuations in each cycle.The average period length is 6.19 years.Using the VAR model and the VEC model as the supervisory factor analysis method,it finds out that the policies and regulations promulgated in 1995 and 2015 has obvious short-term and long-term effects on the motor vehicle underwriting cycle,and there are negative correlation and positive correlation effects respectively.Finally,based on the above results,policy recommendations such as pro-cyclical management and counter-cyclical supervision are proposed to promote the steady development of China's motor vehicle insurance market.