On Origin of Economics for the Shortage of Supply in Liability Insurance

The market share of liability insurance in China is always very small. Government decided to develop liability insurance in the past two years, but the progress isn't very obvious.We analyze the supply of liability insurance economically.There are some reasons to increase the supply expense of liability insurance,such as big moral risk in China,no protection for innovation of insurance,imperfect legal environment and low management,so the supply of liability insurance decreases.On the other hand,the resources of insurance company is so limit that they wouldn't like to provide more to high expense products.We must consider how to encourage the supply of liability insurance if we want to develop it fast.