Research On Establishing Insurance Investment Funds Based On Modern Portfolio Theories

Though China insurance develops at very fast speed and the speed of premium is high, market competition is more intense, underwriting profit margin decreases gradually; the other source of profit in insurance is premium investment that advances slowly. So the backwardness of China premium investment restricts the development of insurance, weakens the competitiveness of national insurance companies. Insurance fund application in China is under 50%, but it is over 90% in developed countries. The insurance in China is a rising industry and its development prospect is wide. In order to expand their own market share and survive better in the day-by-day fierce competitive market, every insurance company tries his best to strengthen his own competitiveness, and it is a very wise choice to strengthen the premium investment and it is helpful to strengthen the key competitiveness. In January of 2003, Wu Dingfu,president of China Insurance Regulatory Commission,put forward that establishing insurance property management companies became the new breakthrough direction of insurance fund management system and operation mechanism. China Insurance Regulatory Commission released "temporary means of management of insurance institutional investor investing stock"in October, 2004. This dissertation relies mainly on theoretical research and subordinately on positive research, has launched carrying on research to the establishment of the insurance investment funds. Firstly, this thesis discusses foreign modern portfolio theories, secondly, analyses the current insurance investment situation in our country and the current insurance investment situations of some foreign countries, then expounds the theoretical foundation of establishing insurance investment funds,then mainly analyses the incomes and risks of the Insurance Investment Funds, finally, discusses the development models of the insurance investment funds. The emphasis of this dissertation lies in using the Modern Portfolio Theory to set up Insurance Investment Funds, so as to widen the channels of insurance fund application, raise the income of the insurance fund and reduce the risk; The key part of the Modern Portfolio Theory lies in the risk --income, so this thesis has analysed the incomes and risks of the insurance investment funds in detail . The new thinking of this dissertation is proposing setting up insurance investment funds and their development model, proposing developing "half open and half close"fund now , and analyzing in the regulation, advantages and disadvantages, risk, require there are limiting conditions in purchase and redemption; research on "half open and half close"about organization , management and administration, distribution of income; developing such varieties of the insurance investment funds: Municipal Bond Fund, Infrastructure Bond Fund , Educational Investment Fund , Overseas Security Investment Fund,Secured Loan Fund.