The Impact Of Commercial Insurance On The Allocation Of Household Financial Asset

With the improvement of the wealth level of Chinese residents,more and more attention has been paid to the allocation of household financial assets,and people have begun to participate in the financial market.Studying how to reasonably and effectively allocate assets for Chinese households has become a hot topic in recent years.Currently,China’s household wealth allocation method is relatively simple and conservative,with a low return on investment and unable to achieve a steady increase in household wealth.Nowadays,the insurance market is developing rapidly,and commercial insurance provides us with a certain degree of material and spiritual protection.It can not only improve the ability of residents to withstand unknown risks,but also affect their preventive savings tendencies,thereby affecting family investment choices.Based on the above,this article explores the impact of commercial insurance on the allocation of household financial assets in China,which is conducive to encouraging residents to participate more actively in the risk financial market,in order to achieve a reasonable allocation of household assets.This article first defines the concepts of commercial insurance and household risky financial assets,and discusses the theoretical foundations of asset portfolio theory,life cycle theory,preventive savings theory,behavioral finance,and so on.Then it analyzes the development of commercial insurance and the current situation of household asset allocation in China.Based on the data from the China Household Finance Survey(CHFS)2019,a Probit model and a Tobit model were constructed to analyze the impact of commercial insurance on the holding rate and allocation proportion of household risky financial assets,and a propensity score matching model was used to address endogenous issues.In addition,based on a regional perspective,this paper divides the national household into urban and rural sub samples;Subsamples from the central,eastern,western,and northeastern geographic regions;The sub samples of first tier cities,second tier cities,third tier cities,and lower urban areas were analyzed for differences,and the impact of commercial insurance on their financial asset allocation among households in different regions was compared horizontally.This article draws the following conclusions: First,China’s overall participation rate in commercial insurance is low,and the allocation structure of household financial assets is unbalanced,mainly in cash and deposits.Secondly,households holding any commercial insurance can increase their likelihood of participating in the risk financial market by 2.76%,compared to 16.91% for uninsured households.Among them,the promotion effect of commercial life insurance on households’ participation in the risk financial market is 3.72%;The promotion effect of commercial health insurance was2.22%.Third,holding any commercial insurance will significantly increase the allocation ratio of risky assets in household assets by 0.37%,compared to 8.45% for uninsured households.Fourth,there are differences in the promotion effect of commercial insurance held by households in different regions: the promotion effect of urban households is higher than that of rural households;The promotion effect in Northeast China is the strongest,with an impact factor of 59.63%.Families in the central region take the second place,with less impact in the eastern and western regions.The positive family effect is strongest in third tier cities and below,followed by second tier cities;The effect on first-tier cities is the weakest.Finally,the following suggestions are given: For government departments,establish a sound market supervision mechanism and strengthen support for commercial insurance;For financial institutions,strengthen product innovation and enhance the diversity of products and services;For families,it is necessary to optimize the asset allocation structure,improve financial literacy,and avoid blindly following the trend.