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To Create Value-based Insurance Company Comprehensive Risk Management Studies

Posted on:2010-08-25Degree:DoctorType:Dissertation
Country:ChinaCandidate:Q ZhangFull Text:PDF
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American renowned finance scientist Peter·Bernstein has said: is not all excessive to emphasize the extremely importance of risk management, it had even surmounted the humanity progress which in the science, technical and the social system aspect obtains. The insurance company as a result of its social role and the particularity of it's operation, risk management appears especially importantly. In brief, insurance company's risk management is all more important than other any kind of enterprise's risk management, should enlarge to a broader system in, impels with a more advanced idea and the technical method.Looks over the domestic and foreign risk management research, we can discover that, enterprise risk management (ERM) is under this advanced idea and the technical impetus product. The present paper's main purpose is take the ERM elementary theory as the foundation, combine the insurance industry's profession characteristic, constructs the ERM value creation dynamic model systematic and the insurance company enterprise risk management conformity frame system, the author has also carried on the comprehensive thorough analysis and the operation mechanism research to the ERM model and the frame system. The paper's content altogether divides into seven chapters, front two chapters are the paper's rationale foundation parts, mainly introduced the enterprise risk management genesis background as well as the domestic and foreign theories and the practice research, and appraised these theories from the value creation angle. Third arrived the sixth chapter is the paper's core part, the author has first constructed the risk management and the enterprise value relations dynamic model; Then constructed the insurance company's enterprise risk management framework which can assist the ERM model to achieve; Finally investigated how the insurance company's capital structure and the capital budget policy to make to achieve the value creation target. The seventh chapter is the paper conclusion part.The first chapter believed that, in the insurance company which occurs unceasingly goes bankrupt and defeat case, the global insurance business are more and more regards to the enterprise risk management (ERM), and has carried on the unceasing exploration and practice in this aspect. ERM becomes the global insurance business risk management's major development tendency. The background of ERM produces including the economical globalization, the finance industry mixes, the supervising and managing standard and the company governs convention to develop, and as well as the financial project technology, the system theory and the computer technology development. This chapter also has carried on the representative literature to the domestic and foreign enterprise risk management, included the insurance business risk management.Second chapter first has studied the relationship between risk management and the enterprise value relations correlation theories, then evaluated the risk management tradition and modern theory from the value creation angle of view. Finally draws the conclusion, in all these theories only enterprise risk management theory in the duty can complete the value creation goal of the company. These theories introduced in this chapter are the important basis and foundation of the value creation dynamic model and the insurance company enterprise risk management framework system which the author constructed in this explore.The third chapter explored the enterprise value creation dynamic model. This research first analysis the ERM goal, and draw the conclusion that "shareholder value maximization" is the most suitable ERM total goal, ERM also can have other minute level goal; The ERM increase enterprise value through venture all kinds of capital costs; The ERM value creation dynamic model's rationale foundation is in the system theory related "the system effect" analysis, risk and capital relations, and "the new insurance model". Finally draw the conclusion that the ERM dynamic model should have three essential factors, they are: Tradition risk management, capital structure and capital budget policy; This chapter also has carried on analysis on the concrete operation of these three essential factors in the system, has constructed the ERM value creation dynamic model, and the model solution process is the insurance company value creation process.Fourth chapter has constructed the ERM conformity frame system for insurance company, this frame system is the support and safeguard which the ERM dynamic model can implement. This conformity frame system including four major parts, they are ERM goal, process, mechanism and movement environment. The ERM goal was the shareholder value maximization (has already carried on analysis in the third chapter); The process is similar with the tradition risk management process, but the concrete content is different; three management mechanisms of the framework are the tradition risk management, the capital structure policy and the capital budget policy; The movement environment mainly includes the enterprise culture, the organizational structure design, the department relations, connection aspects benefit management, data and technical support, etc.Fifth chapter has studied insurance company's capital structure policy from the angle of value creation. The author introduced with emphasis the use of economical capital (EC) to measures enterprise risk, and the EC method's use in insurance company. The economical capital is the most suitable index in which to weighs the enterprise overall risk, also the most suitable index to determines the enterprise capital demand and the capital sufficiency of the company. Using the economical capital to carry on the capital structure decision-making implement is the key promotion and safeguard function to smoothly regarding ERM.Sixth chapter introduced insurance company's capital budget policy and it's relation with the value creation goal of the enterprise. Both of the neoclassic finance theory CAPM model and the RAROC method widespread application in the banking industry, essentially all is the single essential factor capital budget model, and all existence rationale imperfect and deficiency price risk; The double essential factor capital budget model had simultaneously considered the company's "in" and "outside" risk influence, it is significant improvement and promotion to the single factor model, but it was still not the best insurance company capital budget model; The double essential factor model has neglected an important question -- insurance company risk distribution asymmetry, from this, the author proposed "three essential factors" capital budget model which suits the insurance company mostly.Seventh chapter is the paper's conclusion part. Through the study of this work, the author consider that enterprise risk management are related with the enterprise value, through some given routes, ERM can increase the company's value; The way which ERM increase enterprise value is through the reduce of risk cost; The risk management increase enterprise value dynamic model must contain three essential factors, they are the risk management, the capital structure and the capital budget policy and the specific modes system structure; The ERM frame system which supports the value creation model have to contain the ERM goal, the mechanism, the process and the movement environment four parts, these all are the essential safeguards which risk management increase enterprise value; The present stage our country Insurance company enterprise risk management construction should take strengthen the internal control as the key point, and coordinated development Hedging Policy and the economical capital disposition mechanism; The risk management should unify with company's capital management, serves together for the value maximization goal; Different with the bank and other financial organ, the insurance company's capital budget policy should use "three factor" models, but not the traditional "single factor" or the "double factor" model. Finally, the author has induced this research deficiency and the following research directions.
Keywords/Search Tags:Enterprise risk management, Internal control, Value creation, Hedging Policy, Economic capital management
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