A Study On Funds Utilization Efficiency Of Chinese Insurance Enterprises And Its Impact Factors

Increasing competition among insurance companies and the decline in premium rates is already a worldwide trend,with declining profit levels insurance companies are facing both domestic and international challenges.From the experience of developed countries,investment income has become an important source of income for insurance companies,and the efficiency of the utilization of insurance funds is essential.China's insurance market is increasingly open,in which the competition becomes more and more intense.only paying attention to the efficiency of capital utilization,insurance companies can obtain advantage in the brutal competition.The early evaluation method of capital use efficiency is through part of the single factor index or analytic hierarchy process to achieve the index system.This method is simple to operate;data collection and finishing is relatively simple.However,there are some shortcomings,such as the subjective subjective,often lead to erroneous research,and the indicators can not reflect the long-term efficiency of the insurance industry,can not find the actual factors to prevent the operation of enterprises,can not fully reflect the efficiency of the overall use of funds.This method distinguishes all the elements in the complex situation,forms the interrelated ordered structure,and concretely presents it.Combining with some objective and practical subjective inferences,this method mainly uses the two pairs of contrasts to classify the relative key elements.Quantitative analysis is performed and the relative criticality of all the elements of each layer is sorted by mathematical methods.Determine the ranking of all scenarios by the total sort between all levels.The main drawbacks of previous analytic hierarchy process are in terms of consistency of the matrix.Under the condition of high order,it is difficult to achieve consistency when judging the matrix.Under the condition of low order,although the consistency is easy to be obtained,the different scholars will provide their own judgment matrix,and then obtain the respective proportion,The results are affected by uncertainty and subjective factors,making the accuracy of the analysis reduced.Therefore,this article does not select such methods.In addition to the analytic hierarchy process,there are many methods that are widely used in efficiency estimation,that is,the estimation and analysis methods for efficiency frontier.Frontier analysis has been widely used in recent years and plays a key role in efficiency measurement.The core idea is to establish all possible external borders according to their input and output,so that all the output values are in the boundary,the distance between each observation and the boundary is the efficiency of this production point.In the specific use,the frontier efficiency is the relative concept is not an absolute concept,that is,the outer boundary has been formed by the optimal department of the sample or its combination.In the frontier analysis,we can divide the parameter method and the nonparametric method.Parametric analysis of the efficiency of insurance investment,assuming that the production function of the subjective part of the larger impact,because the core of the parameters of the production function of the internal parameters of the calibration.And the determinants of non-direct observation parameters included in the production function must have the influence of subjective factors.This can cause a greater error in the calculated efficiency value.The nonparametric method can solve the problem of containing more input items than the parameter method in practical application.There is no need to establish the actual form of the production function.The ratio of input and output is not necessary.The result is not changed by the unit.Considering the current situation of China's development,if the efficiency of insurance investment is analyzed by parametric method,then the objective value of the production function is assumed to be large,which will cause the error of the calculated efficiency value.Combined with the above discussion,the current non-parametric method should be used to analyze the efficiency of capital use of insurance companies.And the most mature and most widely used data envelopment analysis(DEA).In the use of capital constraints,we can not simply use the capital asset pricing framework to measure the efficiency of the use of insurance companies.At the same time,due to the use of insurance companies involved in the payment of funds and other special expenses and expenses,but also makes us must adopt more complex models,these factors into them.DEA model can solve these two problems.First,the DEA approach can incorporate multiple inputs and output indicators into the model,which is more applicable to insurance funds than the two indicators that only consider investment volatility and expected returns.Secondly,the DEA method estimates the effective frontier of the level of capital use efficiency itself,and then compares the individual insurance companies with this effective frontier,so that each enterprise can be measured at the same time when considering multiple inputs and outputs.Efficiency level.Previous studies have often focused on the single-stage DEA efficiency measure and the analysis of the intertemporal Malmquist efficiency index.However,this paper further adds the Multi-stage DEA model to calculate the overall funds of the insurance companies from the multi-stage and full-sample data Use efficiency.This innovation helps to measure and analyze both the micro-efficiency and the more efficient level of efficiency across the entire sample period.This paper introduces the variable node of the regulatory policy as the standard of dividing the sample interval,introduces the dummy variable of the policy change into the panel model,and estimates the influence of the policy change on the basis of controlling the influencing factors of the influencing factors.From the previous study of the previous point of view,for the regulatory policy on the efficiency of the use of funds are almost limited to qualitative analysis.The quantitative analysis method used in this paper can make a clear comparison of the changes in the efficiency of the use of insurance companies.Based on the efficiency of capital utilization of 16 life insurance companies and 19 non-life insurance enterprises spanning 2006-2010 was measured.Further,the panel regression model is used to analyze the factors influencing the efficiency of capital utilization of insurance companies.Considering the efficiency of insurance funds may be related in time dimension.In order to determine the effect of the efficiency of the previous period on the efficiency of the current period,this paper further uses GMM to estimate the dynamic panel model with efficiency hysteresis to ensure the stability of the empirical results Sex,In the early studies,OLS-based panel regression results were often used,and the self-correlation of the efficiency of funds utilization and the robustness of the empirical results were lacking.The GMM estimation results in this paper exclude the use of funds efficiency in time dimension autocorrelation,confirming the robustness of empirical results.The empirical results show that the efficiency level of the life insurance enterprises has improved steadily,but the efficiency of the funds has not been greatly improved,with an average growth rate of 2.0%.Non-life insurance companies have lower efficiency level than the life insurance companies.But due to technological progress factors,the average efficiency growth rate of 13.1%,higher than the life insurance business.For the life insurance companies,the two factors scale and leverage level have no significant effect on the efficiency of capital utilization.The other influencing factors are at least significant at 5%level.The higher the bachelor degree or above staff ratio and level of corporate governance are,the higher the efficiency of corporate funds will be.The efficiency of capital utilization of joint venture life insurance enterprises is higher than that of domestic life insurance enterprises.For the non-life insurance companies,corporate governance and leverage have no significanteffect on the efficiency of capital utilization during the sample period,and the other factors are at least significant at 5%level.The higher the level of corporate governance bachelor degree or above staff ratio are,the higher the efficiency of corporate funds will be.Joint venture non-life insurance companies utilize capital more efficient than domestic enterprises.Non-life insurance enterprises' scale has negative effect on efficiency,increase in scale of the company leads to the decline in efficiency.China's regulatory authorities'policy to expand the scope of investment in insurance companies and appropriately increase in the upper limit for proportion of risk assets,in fact,relax the insurance companies' regulatory constraints,which be able to enhance the life insurance and non-life insurance companies efficiency level.Therefore,this paper suggests that the regulatory authorities gradually relax regulation regarding investment category and risk asset proportion.But at the same time,complicance supervision should be strengthened,to ensure the insurance industry risk under control and to improve the efficiency of capital utilizatino.