The Research On The Best Investment Portfolio Of Domestic Insurers

Insurance investment is an important mainstay for insurance industry to survive and develop. Insurance investment enables insurance companies not only to offset their possible policy losses and make a profit, but also to decrease the prices of their products, enlarge their market share and get more advantages in marketing competition. If we view from the whole industry and country level, the situation of a country's insurance investment is highly correlated with the solvency capability and the stable development of the industry. After China joined the WTO, the Act of 'Some advice on improving the innovation and stable development of capital market', which was enforced by the State Department on Jan.2004, increased many more channels for insurance investment. Thus, how to meet the demand of the development of insurance market and how to invest insurance capital became an important issue immediately.This paper is attempting to summarize an investment portfolio model that is adaptable to Chinese situation best. Based on the analysis on Markowitz portfolio model, the model is a kind of multi-aimed method and can be used to direct the investment behavior of Chinese insurance companies.The paper briefly introduced some background information of the issue at the beginning, defined the concept of insurance capital and insurance investment, and then discussed basic principles of insurance investment and tools of insurance investment. Furthermore, by analyzing and comparing the history and current situation of national and international insurance investment, the paper put forward some primary problems on Chinese insurance investment. Additionally, Asset-liability theory, Investment risk management theory and Investment portfolio theory, which are parts of Modern investment theory, together with their applications, were introduced.The paper mainly discussed the hypothesis conditions, detailed form and its adaptability on insurance investment of Markowitz portfolio model. Additionally, the paper defined a multi-aimed investment portfolio strategic model, solved it and finally demonstrated that it is more adaptable for Chinese insurance companies.