Research On The Minimum Solvency Of Non-life Insurance Company Of China

Insurance is one of the financial industry which developed these years, but also the fast growing industry. The density of the current insurance is only 3.4% and the insurance depth is 165 dollars in 2010.In developed countries the data are 8% and 3400 dollar. It means we have huge distance with them, but also we have tremendous potential. In our country ,non-life insurance de-veloped slower than life insurance. Recent years ,with the economic devel-opment and the concept of people changed , they become to pay more atten-tion on non-life insurance ,it makes non-life insurance growing faster and faster ,the premium income increase 30% every year. The insurance industry is the life and property security of the security, so the insurance industry is very important. Because of the growth ,it has a lot of problems, so compared with other industries ,the supervise of insurance need innovate and polish.Insurance have developed for 30 years, but supervision of insurance only developed for 20 years. With the development of insurance , the supervision strength have been strengthening. The insurance has invisible risks. Although the company are in the red, the new premium can be pay for old policy. The insured can't know it. But if there no new policy or some big loss happened ,the company will has the rick of no money to pay it. To avoid it, supervision of solvency is very important. The supervision of solvency is the first method which our country used. It has definite validity and operability, so it is the major method of supervision and it has definite effect. Every year, there will be some insurance companies has solvency problems, the china insurance regulatory will supervise and deal with it. Many companies become safe , go back to health orbit.The replenishment factor of solvency is the most effective target for the supervision of solvency. The real solvency needs to bigger than the minimum solvency. The real solvency can be calculated by the real properties and the real liabilities, then the key is the minimum solvency. In this paper, we bring up the standard of the minimum solvency which match with our country.There are five chapters. In Chapter one, the contents of this thesis are in-troduced, including how and why to choose this project, the methods and the structure of this thesis, the innovation and the deficiency. In Chapter two, I in-troduce the theory of solvency, including the meaning of solvency, the method of supervision and so on. In Chapter three, I introduce Ratio Model, and put the income from investments in to the model, the understanding of income from investments can be several, my opinion is one of them. Then I use the data of our insurance market for 2005-2009,obtain the lowest solvency of our insurance companies. In Chapter four, I sum up the changing of our standard in solvency, and set out a new standard which can be better used in our coun-try. In Chapter five, I sum up the main idea of this paper and the results of it.