Information sources and participation in the Chinese insurance market: knowledge as a mediator

Abstract

This study analyses the role of insurance knowledge in mediating between various important information sources and insurance market participation using a large and representative national data set from China. We find that all information sources have a significantly positive effect on market participation. However, the insurance knowledge variable demonstrates significantly positive mediation effects only when the predictors are mass media and community outreach. The government can take advantage of disseminating such information via effective media identified in this paper, thereby achieving knowledge enhancement and maintaining the sustainability of the industry. Moreover, we see that the serious problem of agent misselling is also found in China, which has a devastating effect on insurers’ and agents’ credibility, making any information that they provide unreliable in the eyes of the public.