This paper analyzes and constructs the effect mechanism of property insurance and life insurance on regional economic development. Taking relevant data of 31 provincial-level administrative regions in China from 2006 to 2015 as samples, this paper uses spatial econometric model for empirical analysis to explore the influence degree and spatial difference of insurance industry on regional economic development. The world trade and development organization (WTO) pointed out at its first meeting in 1964 that "The development of a country's insurance and reinsurance market is a crucial part of its economic growth", and the impact of the insurance industry on economic development has long been paid close attention to, which has been a topic discussed by the insurance theory circle in China in recent years. With the rapid development of economy in our country, the insurance industry and national economic development, there were significant regional differences, in order to analyze the reasons for the formation of the regional differences and differences, promote regional economic development, narrowing the regional differences. On the basis of existing research, we use spatial econometric model to analyze the spatial difference of general insurance and life insurance market,and compare the influence degree of the regional economy.First of all, this paper analyzes the influence mechanism of insurance industry, property insurance and personal insurance on regional economic development, and expounds the ways in which insurance plays a role in economic development. Insurance density insurance depth distribution map and economic development distribution map are made through the quarterwise map to roughly reflect the spatial distribution differences. Then, the spatial weight matrix is constructed and the spatial autocorrelation is analyzed. It can be known that they all have significant spatial autocorrelation and spatial clustering. Provinces with similar development level of insurance industry also have similar overall economic level, and provinces gather together in space.In order to further understand the spatial distribution pattern of insurance industry and economic development level in each province, local map analysis of Moran's I and Local Indicators of Spatial Association (LISA) was conducted. In order to further analyze the influence of the insurance industry on the regional economy, the spatial econometric model setting test was conducted on the total compensation expenditure, property insurance compensation expenditure and personal insurance compensation expenditure. In this paper, Spatial Lag Model (SLM) and Spatial Errors Model (SEM) proposed by Anselin(1988) are used to select suitable models. Lm-error and lm-lag were judged to have passed the significance test, while lm-lag was not significant, so the SEM model was selected.Through empirical analysis, this paper obtains the function mechanism and spatial distribution difference of property insurance and life insurance for economic development, and through spatial econometric model, it makes clear that there are significant spatial autocorrelation and spatial agglomeration between the insurance industry and economic development in each province. Among them, property insurance and life insurance have positive promoting effects on regional economic development, but the promoting effect of property insurance is more significant than that of life insurance. Finally, we put forward relevant policy suggestions based on the research.First, China should vigorously develop the insurance industry and give full play to its role in driving economic growth and lifting people out of poverty. Insurance has economic compensation, financing and social management functions, can be used to pass on risk, the implementation of compensation, investment income and guarantee, etc., have an important role in the development of economy, our country should give full play to the development of the insurance industry space effect, the regional economic development, gradually lead people out of poverty. Second, we coordinated the development of the regional insurance industry and the regional economy. The government and relevant departments should promote regional coordinated development, use the role of insurance in regional institutions and development to carry out macro-control, and narrow the gap between the rich and the poor to balance regional development level. Third, speed up the innovation of insurance business, improve the education level of residents and formulate insurance standards. Popularize the public insurance knowledge, so that residents have more choices to buy insurance.