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Life‐insurance Efficiency in China: A Comparison of Foreign and Domestic Firms
Author(s) -
Chen Bingzheng,
Powers Michael R.,
Qiu Joseph
Publication year - 2009
Publication title -
china and world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.815
H-Index - 28
eISSN - 1749-124X
pISSN - 1671-2234
DOI - 10.1111/j.1749-124x.2009.01173.x
Subject(s) - china , business , domestic market , government (linguistics) , life insurance , foreign ownership , insurance industry , international economics , international trade , economics , market economy , foreign direct investment , actuarial science , macroeconomics , linguistics , philosophy , political science , law
The Chinese life‐insurance industry has experienced major structural changes in recent years, primarily because of increasing demand and the entry of foreign insurers. Although the market is clearly booming, the efficiency of its growth and development is unclear. In this paper, we evaluate the efficiency of life insurers operating in China and compare foreign firms with domestic firms. We find that foreign insurers have not brought efficiency into the Chinese market, and that the market is still dominated by domestic giants. However, the gap between foreign insurers and domestic insurers is narrowing. After testing hypotheses regarding scale economy, technical progress and potential improvements, we discuss several issues of importance to life insurers, market investors and government regulators.