Study On Insurance Investment Fund In China

Investing is the essential business of insurance company, that is to say, insurance company would go bankrupt if insurance funds weren invested scientifically and rationally. Nowadays 40% percent of investment funds in the world is controlled by insurance companies, and investment of insurance funds has become more and more important for the development of modern insurance company and finance company. The level of insurance funds? research and management in American and European is much higher than in our country now. It is contributed to the high emphasis on productive operation of insurance funds. Comparatively, the investment of insurance funds in our country developed very slowly for political, economic and other reasons. Especially since 1996,insurance companies of our country are confronted with the deficit result from seven successive drops of the interest rate, which bring out the potential danger for the development of insurance companies. On the other hand, faced with the coming entrance to the WTO , insurance company of our country are endowed with the mission to revive our nation抯 economy. Besides, the crisis of payment for insurance companies is one of three potential financial crisises. The ability of payment is decided by profit rate of insurance funds?investment. Therefore, how to broad the road of investment and develop the investment of insurance funds has become the imperial problem which need to be solved by government, manager of insurance companies and economics scholar. In Oct., 1999, insurance funds were permitted to enter into stock market. Then how to invest insurance funds into stock market became a sensation which was debated heatedly. The perfect macro-economic and micro-economic environments are the premise to the development of insurance funds? investment, and the portfolio management theory fit to our stock market is the indispensable basic. But the research on construction of stock market and portfolio management theory are still at a low level and can adapt to the development of investment in our country. Therefore, we should use the experiences of developed-country for reference, because the advanced technologies and theories of developed-countries will give us some useful inspiration. The point of this article is to discuss the Insurance Investment Fund. As a Investment Fund, the Insurance Investment Fund is specially designed to meet the investing demand of insurance fund. On the basis of the portfoliomanagement theory and the economics of information, I demonstrate the possibility of establishing the Insurance Investment Fund. Furthermore, I practically analyze the social economic and political environment for China s developing the Insurance investment Fund. Finally I put forward the strategy and composition to put up the Insurance Investment Fund in China.