Acta Geographica Sinica ›› 2017, Vol. 72 ›› Issue (8): 1347-1360.doi: 10.11821/dlxb201708002

• Industrial Development • Previous Articles     Next Articles

The geographical expansion and profit of property insurers

Xiangnan WANG()   

  1. Institute of Finance and Banking, Chinese Academy of Social Sciences, Beijing 100086, China
  • Received:2016-05-02 Revised:2017-01-30 Online:2017-08-20 Published:2017-08-20
  • Supported by:
    National Natural Science Foundation of China, No.71203133;National Social Science Foundation of China, No.13&ZD161


There is significant spatial stratified heterogeneity in the operating conditions of property insurance industry in China. What is more, China's property insurers have carried out a rapid geographic expansion in recent years, then, how does the geographic expansion affect the profit of property insurers? On the basis of the panel data of China's 64 property insurers during the period from 2006 to 2015, this paper estimates the the profit efficiency for each property insurer using the geographically-weighted method. Moreover, through the regression analysis with five geographical expansion measures, we draw the following conclusions. (1) Geographical expansion is significantly and positively related to the profitability and more than 60% of the positive correlation attribute to the larger possibilities of higher profitability insurers to carry out geographical expansion. (2) Geographical expansion also plays a positive role in property insurers' profitability to some extent. Other things being equal, the number of the provincial-level regions where an insurer operates increases by 10, the premium income share from the provincial-level regions other than its headquarters-located region increases by 10 percentage points, the concentration ratio of the premium income across provincial-level regions decreases by a unit of standard deviation, and the average distance between the headquarters and its branches increases by 1%, the profitability of the property insurer will increase by 2%, 1%, 2% and 1% of a unit of standard deviation in the sample, respectively. (3) It is difficult to reach a conclusion on the positive impact of geographical expansion on profitabilitywhen the profit efficiency is estimated by ordinary methods.

Key words: property insurers, geographical expansion, profit, spatial stratified heterogeneity, China