A Study On Proportion And Strategy Of Insurance Funds Directly Investing In The Stock Market

In the recent years, ever since the fast development of our insurance market, the scale of insurance premium has extended continuously, with an annual growth rate of over 25 percent in the past three years, which is much higher than that of GDP in our country. However, behind the scenes of the fast development in insurance industry, its profit from the insurance coverage appears to be in deficit during the recent three years, and the incapacity on insurance solvency is becoming increasingly an outstanding issue. The experience of insurance industry in foreign countries shows that its profit from insurance coverage is very limited, or even in deficit over a long term; foreign insurance companies mainly make up the deficit by the investment yield of the insurance funds.The paper, based on the above viewpoint, starts its analysis from the characteristics of the insurance industry and the insurance funds, absorbs the domestic and foreign research findings on insurance investment, and collects data from the home insurance sector and stock market. It studies the proportion and strategy on investment of insurance funds by establishing an econometric model, and tries to make the research on the insurance investment in the stock market more realistic and maneuverable.Firstly, the paper overviews research on investment of insurance both at home and abroad. Then the article emphasizes on the study of the proportion of insurance investment. Through analyzing and comparing three models on investment of insurance funds, the paper at last chooses the one that considers the underlying risk as the empirical study model. According to the empirical studies on insurance and stock market in our country, the paper studies the optimum proportion of insurance investment in theory, and then based on kinds of domestic laws for insurance investment, it gives the superior proportion of our insurance investment after learning the current situation of the stock market and circumstances of the insurance industry,The paper explains why it chooses to analyze the strategy of investment inconvertible bonds among other kinds of securities. Then by analyzing the features and risk of convertible bonds, as well as the model on making price of convertible bonds, the paper, in particular, analyzes the important role that convertible bonds plays in the investment portfolios. The paper ends with corresponding strategies of insurance bunds investing convertible bonds from the point view of various choices of convertible bonds in different circumstances and the arbitrage strategy in no-short selling market.