Demand for Corporate Insurance in China Empirical Analysis with Province-Level Panel Data

Corporate insurance was the dominant sector of the property insurance market in China before 1989. However, in recent years the growth rate of corporate insurance premiums has steadily slowed and the share of this business line in total property insurance has decreased dramatically. Factors having an impact on the demand for corporate insurance are explored, using provincial-level panel data to extend the empirical analyses in previous studies on this topic. The regression results show that the loan ratio, the corporation tax ratio, and the proportion of foreign-owned companies are significantly related to demand for corporate insurance and are consistent with the predictions of theoretical economic models. The effects of gross domestic product (GDP) and industrial structure cannot be ignored. The findings provide valuable insights for both insurers and regulators in China.