Abstract: This paper explores the factors affecting the underwriting profit differences in automobile insurance from the perspective of the supply of insurance companies and from the perspective of the demand of consumers at different regions.The detailed contribution degrees of all the influencing factors are also measured accurately by using Oaxaca-Blinder decomposition.The results show that the factors from the supply side of insurance companies,such as the number of branches,whether listed or not,operation years,market situation and company nature,all have an impact on the underwriting profits,among which,the number of branches has the most important effect.From the demand side of automobile insurance,such factors as the regional economic development level,the average mileage and the direct property loss in traffic accidents also have impacts on the underwriting profit of automobile insurance,among which the economic development has the most significant impact.The conclusions of the study from both the supply side and demand side indicate that at present the winning strategy in China’s automobile insurance market is still the“quantity”.Only by making great efforts to continuously possess larger market share in the ever increasing numbers of cars,can the insurance companies obtain some profits by virtue of their scales.All the input concerning the“quality”of automobile insurance shows no significant effect for the time being.

Key words: automobile insurance, underwriting profit, supply, demand, Oaxaca-Blinder decomposition