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Information asymmetry and stock life insurance company's multi-agency problem


Abstract: The information asymmetry is Insurance One of the main features of the market, it is to the insurance companies and other aspects of management have brought a great impact. This paper introduces asymmetric information and principal-agent theory; and use this theory to analyze the stock life insurance company's multi-agency problem between shareholders and managers that the agency problem,[link widoczny dla zalogowanych], the insurance company and the agency problem between the marketers and insurance between the company and the customer agency problem; Finally, multi-agency problem solving ideas and measures. Keywords: stock life insurance company information asymmetry measures multiple agents last year, China's largest life insurance companies - China Life - After the shareholding system reform after the successful implementation of the overseas listing became the first landing at the same time the United States and Hong Kong's capital market, the state-owned financial enterprises, marked the life insurance industry and China's financial reform has entered a new period. However, we must clearly recognize that listed both opportunities, but also brought challenges. For example, for stock life insurance company, in corporate governance: how to handle the majority of investors and shareholders of the relationship between the company? In an insurance sales: How to members of a large marketing team to minimize the negative impact? Management in the background: how to improve and control the quality of underwriting risk and thus improve the company's risk control and prevention capacity? To study these issues and come up with strategies not only for life insurance companies have listed stock on the new platform to achieve new development is of great practical significance; but also for the future is about to enter the overseas capital market, insurance companies and other important reference value. This paper attempts to point of view of asymmetric information to analyze and discuss these issues. First, information asymmetries and principal-agent theory in modern economics , the traditional general equilibrium theory of perfect information assumption implies that market participants there is no information asymmetry between matter of fact, this assumption and the actual situation of the modern economy is too far away. Because the reality of information between market participants in general is asymmetric, so-called information asymmetry is reciprocal between the economy is not as symmetrical distribution of knowledge about certain events or probability distribution. In economics can be principal - agent theory to analyze the information asymmetry problem (Weiying, 1996). In law, when authorized by B A A engage in certain activities on behalf of, the principal - agent relationship took place, A called the client, B is called an agent. But the economics of the principal - agent refers to any transaction involving asymmetric information, transaction information superiority in the party as an agent, the other is called the principal. [1] In short, insiders (informed player) is the agent, not an insider (uninformed player) is the principal. Of course, this implicit assumption behind the definition, the insiders of private information (action or knowledge) did not affect the interests of insiders, or that the insiders did not insiders have to take risks. This also shows that the problem of asymmetric information and principal - agent problem is equivalent to the problem. In short, as long as the establishment or signing a contract before and after the market participants to master the information asymmetry between the two sides, that economic relations can be considered to be the principal - agent relationship. Principal - agent theory is specialized in information asymmetry arising from adverse selection and moral hazard problems. Adverse selection which refers to the establishment of the principal - agent relationship before the agents already have some clients do not understand the information, which information may be detrimental to the trustor. With these agents may be detrimental to the client information entered into the contract to their advantage, while the principal disadvantage of information have been adverse selection in the position, which may lead to adverse selection. Moral hazard refers to the agent to maximize their own utility at the expense of the effectiveness of the client or the behavior of other agents, that is, the establishment of the principal - agent relationship, the agent may make use of information superiority damage to the interests of clients behavior. Second, the joint-stock insurance company's multi-agent [2] The problem As mentioned above, information asymmetry is a normal market economy, which exists in almost every industry, thus bringing The information superiority is an agent, and shareholders at an informational disadvantage for the client; Secondly, the insurance company and the terms of the relationship between the marketing staff, on the one hand, from an economic point of view, marketing, sales staff in the policy which is information superiority can be seen as agents, and insurance companies at a disadvantage for the client information; the other hand, from a legal point of view, marketers and agency contract signed by the insurance company has been clearly identified, the former agent, while the latter is the principal; Finally, insurance companies and look at the relationship between the insured, the insured is information superiority for the agents, and insurance companies in the information disadvantage to the client.