Economic Analysis on Development of Marine Insurance in Shanghai

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Economic Analysis on Development of Marine Insurance in Shanghai WANG Yun, LIU Juanjuan Research Institute for Science of Water Transport Economy, Shanghai Maritime University, 1550 Pudong Av., Shanghai, China wangyun1896@163.com Abstract: This paper studies the relationship between marine insurance and the development of shipping, finance and regional economy based on statistics. We use the quantitative analysis method, partial correlations method, to find out the key factors in local marine insurance development. Though the analysis we conclude that Shanghai has advantages in such key factors as property insurance development and cargo handling capacity. These advantages should help Shanghai to develop marine insurance most effectively, strengthen the link between international shipping and finance development, and continuously promote the local economic development. Finally, the paper suggests high-priority development of marine insurance in Shanghai. Keywords: Marine Insurance, Partial Correlations, Economic development

1 Introduction
The government document, suggestions for development of modern service and advanced manufacturing industry and establishment of international finance and shipping center in Shanghai, is significant to the economic reform and long-term development of Shanghai. It is also a strategic plan for further promoting reform and opening up policy, transforming the economic development mode and enhancing overall national strength. In order to achieve the goals, marine insurance industry should be put great emphasis on because it relates to both finance and shipping factors. Ship financing, fund settlement, shipping market derivative and marine insurance are traditional finance services in shipping industry. Marine insurance is a branch of insurance with a long history. The objects of insurance are not only ships, cargoes and other movable property on the sea, but also the freight, rate, commission, expected interests and third party liabilities due to the maritime perils. Marine insurance initiated early in Western countries, but its contents changed rapidly according to its appliance. The studies of marine insurance mostly concern its juristic aspect. Martine RemondGouilloud (1990) [6] conducted theoretical research of marine insurance by systematical modern insurance ideals. Modern theories of economics and management bring the theory of marine to completion. Hong Zou, Mike B. Adams (2006) [2] studied the logistic insurance as a major property insurance. Through the research of the purchasing behavior of property insurance of Chinese enterprises, a link was established between insurance and economy. Research of marine insurance is a new direction for scholars in China. Marine insurance is separated from logistic insurance. As water transport is a vital form of logistics forms, marine insurance is also essential in logistic insurance. Li Henqi (2007) [5] studied the risks of modern logistics and demands for logistic insurance. Ren Ying, Wang Wei (2009) [7] analyzed the accelerating effect of insurance to the development of logistic industry. The development of marine insurance can bring along the finance, shipping, and overall development in the whole region. Jin (1993) [3] set the establishment of shipping center and transport network as primate strategy based on the analysis of the trend of economic globalization. A hierarchical shipping center network should be surrounded by core city in order to promote cooperation. Khan (2000) [4] considered that the effect marine insurance bring about is a result of ‘Economics of Scale’ in finance system and improvement of integrated efficiency. International shipping center denotes port city with hard infrastructure such as container transportation hub port, deepwater fairway, collection and distribution network, and soft infrastructure such as finance, trade, and information services. The

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