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This paper aims to investigate the relationship between traditional life insurance
and financial performance using the panel data from 2005 to 2015 of life insurers in
China. The results show that there is a significant positive correlation between the
traditional life insurance business and the financial performance of the company. It
shows that the sales of the traditional life insurance business have a positive effect on
the financial performance of the company, which leads to the higher premium income
ratio of the traditional life insurance business and the higher the return on asset. In
other words, if life insurance companies want to have better financial performance,
expanding the traditional life insurance business is still the right product strategy.
At the same time, the study also found that the interaction between traditional life
insurance business and the development of high income areas was significantly
positively correlated with the financial performance of the company. Specifically, life
insurance companies in high income areas to sell traditional life insurance business
can improve the financial performance of the company.
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