| In 2018,China's total premium income was US $574.877 billion,with a global market share of 11.07%,ranking second.The Chinese insurance industry has become an important pillar of sustained economic growth with its rapid growth.However,the property insurance industry is in a long-term industry loss stage,especially for small and medium-sized property and casualty insurance companies.Profit is the cheapest source of capital.Profitability is an important manifestation of the strength of insurance companies.Of course,high-speed growth is the basis for growth,but continuous profit is the prerequisite for strength.For small and medium-sized property and casualty companies,improving profitability has become a top priority for giving back to investors and achieving sustainable development.It is an important strategic issue that the company must face,and it is also an important guarantee for the healthy development of the insurance industry and the establishment of a stable risk protection system and financial system.To this end,based on a thorough understanding of the profitability of small and medium-sized property and casualty insurance companies in China,this article conducts a comprehensive study and a single in-depth study of the internal factors that affect its profitability,especially the factors that the company can control or adjust,in order to propose some strategies for improving the profitability of small and medium-sized property and casualty insurance companies in China.Details as follows:1.This dissertation uses mature and reliable profitability evaluation indicators to evaluate the profitability of China's small and medium-sized property and casualty insurance companies.The results show that the profitability of China's small and medium-sized property and casualty insurance companies needs to be improved.The underwriting business is basically loss-making,and although the investment business is profitable,it cannot completely make up for the underwriting loss.At the same time,it attempts to think and design the index of the risk adjustment profitability evaluation of property insurance companies.2.On the basis of reviewing and sorting out related research on the external and internal factors affecting the profitability of property insurance companies,taking small and medium-sized property insurance companies in China as samples,this dissertation conducts a comprehensive study of the company's controllable factors such as the characteristics of the board of directors,the structure of human capital,the characteristics of the underwriting business,and the characteristics of the investment business.It is found that increasing the number of boards is beneficial to profitability;increasing the number of independent directors is not good for profitability;organizational cost caused by change of chairman will reduce the profitability in the short term,and the long-term impact needs more data to analyze;hiring more experienced personnel can help improve profitability;increasing the proportion of senior management can effectively improve profitability,especially investment profitability,and reduce operating risk;increasing the proportion of marketing personnel will help business development,but the negative impact on profitability and make operating risk Increase;the service charge proportion shows a significant positive ?U? relationship to the overall profitability of small and medium-sized property and casualty insurance companies;high reinsurance ratios is conducive to profitability and reduce operating risks;The increase in the business volume of small and medium-sized property and casualty insurance companies often comes at the expense of quality,and its marginal benefits cannot keep up with marginal costs.Therefore,we cannot blindly expand our business and should pay attention to the quality of new business.3.Further research on underwriting business: The article compares and analyzes the profitability of different types of insurance in the property and casualty insurance industry,uses empirical data to provide a reference to adjust the structure of their insurance products,and introduces the cost-volume-profit model under uncertainty as a quantitative decision-making tool for small and medium-sized property and casualty insurance companies when adjusting their insurance structure.4.Further research on investment business: At present,the profit source of small and medium-sized property and casualty insurance companies mainly depends on investment profits.A model is established under the principles of comprehensive consideration of safety and profitability,and research on how small and medium-sized property and casualty insurance companies adjust investment asset allocation to achieve expected returns Maximize.It is recommended that when the solvency adequacy ratio still has room to fall,even if the underwriting yield is negative,the underwriting business volume can be expanded to gather more funds for investment;it is recommended that small and medium-sized property and casualty companies consider alternative investment objects such as real estate and infrastructure debt plans.5.Further research on tax cost: This dissertation study the impact of the business tax replaced with VAT policy on all financial industry companies,including small and medium-sized property insurance companies,and find that small and medium-sized property and casualty insurance companies in China should actively adjust cost items to maximize the deductible part of costs.The increase in investment in fixed assets will increase the accumulated depreciation and thus increase operating costs.Although the performance can be improved by using input deductions in the short term,the offsetting effect of continued increase in investment in the long term is unknown.At the same time,investment activities will occupy a lot of cash.The returns are uncertain.Therefore,enterprises should combine immediate benefits with long-term benefits,control the scale of asset investment,and improve the scientific nature of investment decisions.The possible innovations and features of this dissertation are:1.Existing literature has conducted more theoretical and empirical studies on the factors that affect the profitability of insurance companies,but there are still some factors that have little or no research on the profitability of insurance companies.For example,there have been some related studies on the impact of the chairman 's change on the company 's operating performance,including profitability,but research on the insurance industry is rare;there is also little research on the impact of human capital structure on the profitability of insurance companies,and some structural characteristics such as the proportion of marketing personnel have not been included in the scope of the study;In addition to the research on the influence of diversification or specialization on the profitability of property insurance companies,the research on the influence of other characteristics of underwriting business,such as service charge proportion and reinsurance arrangement,on the profitability is lacking.In the third chapter,this paper comprehensively studies the factors that affect the profitability of small and medium-sized property insurance companies in China,including these factors,in order to make clear how to adjust these factors to improve the profitability.2.Scholars have made some useful attempts in the design of insurance companies' risk-adjusted profitability indicators,but they are still inadequate compared with similar studies in other financial industries.Chapter 2 of this article attempts to think about and design the indicators for the profitability assessment of the risk adjustment of property insurance companies,and applies these indicators to the comprehensive study of the factors affecting the profitability of small and medium-sized property insurance companies in Chapter 3.This kind of research that puts profit and corresponding risk status in the same framework is insufficient.3.The influence of diversified operation or specialized operation on the profitability of property insurance companies is the focus of relevant academic research.However,under the background that most of China's small and medium-sized property insurance companies adopt the product diversified operation mode,it is more meaningful to study how to adjust the insurance structure to be more conducive to the profitability,and also to improve the profitability of China's small and medium-sized property insurance companies More important decision-making issues in terms of power.In Chapter 4,based on the data of three types of insurance,company and time,the paper compares the profitability of each insurance product,and provides reference for small and medium-sized property insurance companies to adjust the structure of insurance products with empirical data.Finally,the paper introduces the cost volume profit model under uncertainty as a quantitative decision-making tool for small and medium-sized property insurance companies to adjust the structure of insurance products.4.The C-ROSS was formally implemented from 2016.The business tax replaced with VAT policy of the insurance industry was also implemented from May 2016.The new policy is not only a new constraint but also a new idea for the research on the profitability improvement of small and medium-sized property insurance companies.In Chapter 5,this paper takes the capital occupation constraint under the second generation as the consideration of safety,and considers the investment proportion constraint of insurance companies to conduct investment asset allocation research for small and medium-sized property insurance companies whose expected function is maximized as the objective function.Aiming at the various problems existing in the discussion of total investment assets in the relevant literature in the past when establishing the income model,the dynamic total investment assets were converted into static assets based on the analysis of the characteristics of different funding sources to facilitate the simulation calculation of investment income.In Chapter 6,study the impact of VAT reform policies on the profitability of all financial companies,including small and medium-sized property insurance companies,and discuss how to fully adapt and use VAT policies to improve the profitability of China's small and medium-sized property insurance companies.Since the financial industry is one of the last batch of industry reforms,at this time other industries have always been the VAT taxation model,or just changed from the business tax taxation model to the VAT taxation model,so it is impossible to follow the thinking of other literature that uses the double difference model to analyze,and select the industries that have not yet carried out business to value-added as the control group.In this paper,the solution to this problem is to select the industry that has always adopted the VAT taxation model as the control group,reversely adjust the time dummy variable of the double differential model,and do the reverse impact analysis of the empirical results to achieve the research purpose.5.This article enriches the research on small and medium-sized property and casualty insurance companies.Although small and medium-sized property and casualty insurance companies and large-scale property and casualty insurance companies are in the same macro environment,the market position and the right to speak are obviously different.Research on the improvement of profitability of different sizes of property and casualty insurance companies is likely to have different results,and the relevant literature also shows the relationship between some influencing factors and profitability tends to be a piecewise function relationship with company size as the threshold variable.It is necessary to take small and medium-sized property insurance companies as the research object,but there are few targeted studies. |
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