Abstract
Using the Translog model and the data of all life insurance companies in China from 2012 to 2015, this paper analyzes the scale effect and scope effect in China's life insurance market. In this paper, the premium income of various types of insurance as the output of the company, rent and wages as input elements, Commission and commission expenditure, business and management fees as the operating costs of insurance companies. The results show that both large & medium-sized life insurance companies have economies of scale, and the scale effect of small life insurance companies is significantly stronger than that of large & medium-sized life insurance companies. In terms of scope effect, it is difficult to draw a unified conclusion from the 2012-2015 year's model results. According to the results of the model in 2015, ordinary life insurance and health insurance, health insurance and other insurance have cost-complementary effects.
Highlights
In recent years, China's insurance market has made great progress, and industry supervision has undergone great changes
Compared with the property insurance industry's 2014 premium income data, the auto insurance market accounted for 73.2% of China's property insurance market, property insurance and liability insurance accounted for 5.7% and 3.4% respectively, and other insurance types accounted for 17.7%, and auto insurance occupied more than 70% of the market far exceeds other types of insurance
MODEL RESULTS AND ANALYSIS As the Translog model has many regression coefficients and the regression results are long, the results of the scale effect and range effect are only shown in the paper
Summary
China's insurance market has made great progress, and industry supervision has undergone great changes. Whether there is scale effect and scope effect in China's insurance industry, whether insurance companies expand their business scope and provide diversified insurance products is more conducive to insurance companies to improve the efficiency of resource allocation and reduce the average operating costs. Compared with the property insurance industry's 2014 premium income data, the auto insurance market accounted for 73.2% of China's property insurance market, property insurance and liability insurance accounted for 5.7% and 3.4% respectively, and other insurance types accounted for 17.7%, and auto insurance occupied more than 70% of the market far exceeds other types of insurance There is a slight increase in the trend, and the proportion of investment-type life insurance products and accident insurance is relatively small
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