Factors influencing consumers' life insurance purchasing decisions in China

Abstract

The Chinese insurance industry has been growing substantially, and this provides a motivation to examine the insurance market in China. This study used survey data to identify key determinants related to Chinese consumers’ ownership of life insurance, by using a probit model. The results revealed that several groups of variables influence Chinese consumers’ life insurance purchases, including knowledge and trust, consumer profile and investment preferences, importance of product attributes, and socio-demographics. Also, this study applied factor analysis to investigate factors that are important for Chinese consumers regarding life insurance. Factor analysis results indicated that four factors are identified including importance of product attributes, consumers’ financial strength, consumers’ attitude and trust toward the life insurance industry, and consumer attributes. Lastly, to better understand Chinese consumers regarding life insurance, consumers were segmented into three main groups through applying cluster analysis. Each cluster shows distinct differences in purchasing criteria and socio-demographic characteristics.