A Study On The Impact Of Social Networks On Insurance Consumption Of Urban Households In China

In recent years,China’s insurance depth and density have generally expanded,but the growth momentum is unsustainable.2022,China’s insurance depth was 3.88%and insurance density was RMB3,326 per person,neither of which has reached the goals proposed by the State Council in 2014 in "Several Opinions on Accelerating the Development of Modern Insurance Service Industry" that by 2020 China’s insurance depth should reach 5%and insurance density should reach RMB3,500 per person.The problem of insufficient demand in China’s insurance market still exists for a long time.At the same time,the level of urbanization in China is steadily increasing,and the urbanization rate of China’s resident population will be 65.22%by the end of 2022.The portrait of consumer groups in China’s commercial insurance market will tend to be more and more towards people with economic characteristics of urban families.Although the assumption of "rational man" is used in economics to study microeconomic decision making,in reality,the economic activities of residential households are embedded in social networks and influenced by social networks,and insurance consumption is no exception.Against the above background,this paper investigates the effect of social networks on insurance consumption of urban households in China and the channels of influence.This paper firstly introduces the analysis of social networks and commercial insurance consumption from the theoretical level and puts forward the research hypothesis of this paper,then further analyzes the development status of social networks and commercial insurance consumption in China,and on this basis sets up Probit and Tobit models respectively from two levels of the likelihood of social networks influencing insurance consumption of urban households in China and the depth of participation using 2019 CHFS data The empirical analysis is conducted.It is found that social networks have a significant contribution to the likelihood and depth of participation of urban households in insurance consumption,which is tested to be achieved through the financial knowledge channel;the effect of social networks is"inverted U-shaped" and heterogeneous at the levels of household economic endowment,human capital and region,i.e.,for households with lower economic income or assets,the effect of social networks on the likelihood and depth of participation of urban households in insurance consumption is significantly higher.The effect of social networks is "inverted U-shaped" and heterogeneous at the levels of household economic endowment,human capital,and region,i.e.,the effect is greater for urban households with lower household economic income or assets,those with heads of household with education below high school,and those in central and western regions.Based on this conclusion,this paper proposes feasible policy recommendations to improve the current situation of underinsured in China’s insurance market from four aspects:playing the role of social network key positioners,improving insurance product design,strengthening insurance publicity and education,and building high-quality social networks.