An Empirical Analysis of the Factors Influencing the Development of Insurance Industry in China

Abstract

This article analyzes the relationship between inflation, increase of investment in fixed assets, monetary policy, financial openness, national savings, macro-economic climate index, deposit rate, and the development of insurance industry in China. We set the incremental indicators as the variables and constructed an analysis integrating a multiple linear regression, stepwise regression, and robustness analysis, and used historical monthly data sample during the period of January 2004 to December 2017 for empirical analysis. The result indicates that (a) the national savings and macro-economic climate index are the major factors that influence the development of insurance industry in China by now; (b) to improve the development of insurance industry, both the economic growth and people’s income should continue to advance; and (c) financial openness should be paid more attention to, which is insufficient, and there is lack of competitive vitality in the whole insurance market.