Study On The Risk Management In Application Of Insurance Funds

The use of insurance funds is an important source of insurance company profits and an important pillar of the insurance company survival and development. Due to historical and regulatory reasons, to a large extent many limitations which is intended to control the use of insurance funds in our country may restrict the insurance company's development. With the continuing of our financial reform and the improvement of the regulatory supervision level on insurance, China's restrictions on the use of insurance funds will grow less and less and the investment channels about insurance funds will be also expanding, of course, the risk insurance companies facing will continue to grow bigger and bigger at the same time. In China, however, the old risk management concept, not strong enough risk awareness and not enough quantity of professionals in the insurance company make the use of China's insurance funds face huge risks. Therefore, our insurance companies should closely follow the form of economic and financial development at home and abroad in order to strengthen the use risk management of funds.The use of foreign insurance funds, risk management and regulatory conditions are introduced in this paper, at the same time the use of China's insurance funds and risk management situation are also done. As well as risks and risk management methods by which the international insurance fund is applied are given a brief introduction and analysis. Combined with the common method of foreign risk management, our risk Management of using insurance funds is researched on the basis of analyzing our risks about using insurance funds. China's problems of using insurance funds are analyzed by the use of portfolio theory and VAR models. It is suited to China's actual situation to bank deposits accounting to the high proportion of the insurance funds allocation for the long term. It will only increase the risk of the portfolio to blindly reduce the share of bank deposits in the insurance funds allocation.First, the use of the national insurance fund, risk management and regulation in major international status are given a brief description and analysis, and its effect on our inspiration.Second, China's use of insurance funds and risk management are given the analysis, and the risk management of currently using China's insurance fund is given the shortcomings.Third, by the use of Markowitz's portfolio theory, combined with China's actual conditions, an optimal portfolio is constructed for using China's insurance funds, while that compared to the actual investment portfolio to describe the unreasonable of the China's current insurance funds allocation. Fourth, the actual configuration of China's insurance funds, the VaR value, is calculated by the use of VaR models. Compared with the VaR value of the optimal combinations, the risk of the present China's insurance funds allocation is illustrated. At the same time the risk profile of assets is analyzed through the VaR tools. That once again shows that China's current insurance fund allocation is unreasonable. Finally, theory and empirical results are given a comprehensive evaluation in this text, and accordingly writer put forward his own policy recommendations.