Abstract
The property insurance industry in China has achieved rapid growth since 1980s. However, further growth and development has been restricted for several reasons. While there are a variety of property insurance products, the product portfolio is unbalanced. Also, the early stages of these products are too simple to meet the diverse requirements of policyholders. Finally, certain products of different companies are somewhat duplicative. Based on the Structure Conduct Performance (SCP) analytical framework, the research paper analyzes various management index indicators and market competitive behaviors of China’s property insurance market in recent years. Utilizing germane data to perform an empirical study model, this paper elaborates on the importance of product structure on the property insurance market and proposes related measurements of practical and theoretical significance. These include the delicate management of the auto insurance business, expansion of the non-automobile property business, etc. The paper also provides suggestions on improving the current business structure, increasing the industry’s probability of profitability, lowering management risk, strengthening the competitiveness of the business enterprise, and achieving a more productive and efficient increase in the development of China’s promising property insurance market.
Highlights
Introduction and Literature Review1.1 IntroductionSince the 1980s, China’s insurance industry has achieved sustainable and rapid growth
Through the incorporation of industrial organization theory, this paper analyzes the current status of the Chinese property insurance business structure and makes some comments and suggestions, which should improve the sustainable development of the domestic insurance market
We provide an in-depth study of the property insurance business structure, which should advance both theoretical and applied research in this area
Summary
Since the 1980s, China’s insurance industry has achieved sustainable and rapid growth. Many Chinese property insurance companies are focused primarily on scaling premium income and enlarging market share via a pricing strategy. The virtual commoditization of product offerings is combined with a relatively undifferentiated approach to the marketing and service function by different insurance companies. Because of these factors, pricing has become the main competitive approach. This has resulted in a homogeneous business structure that has created a “bottleneck” type problem in China. Through the incorporation of industrial organization theory, this paper analyzes the current status of the Chinese property insurance business structure and makes some comments and suggestions, which should improve the sustainable development of the domestic insurance market. With the approaching twelfth anniversary of China’s accession to WTO, this analysis of the structure practiced by property insurers can give foreign property insurance companies an insight into the Chinese insurance market
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