The Applied Research On Dynamic Solvency Testing Of Life Insurance In China

Life insurance in our country is faced with serious crisis in solvency, which puts forward higher requirements in assessments approaches, when the life insurance supervisor tries to give solvency warnings. So that, in order to get an effective warning, the former static supervise index should be combined with dynamic supervision. Then what kind of dynamic supervision we should choose? This paper mainly discusses the application of Dynamic Solvency Testing (DST) in life solvency warnings in our country.DST is a kind of approach, which analyzes insurance company's solvency under varieties of circumstance in future. As a tool of warning, it can provide useful information such as a company's financial situation, solvency, profiting ability of products. A life insurance company, through DST, can find some factors which may endanger the regular operation of the company.The paper starts with assessment approaches of solvency, dissects the formation of DST from both historic and managerial perspective analyzes the development of DST in Canada & USA, and then a conclusion has been reached that the exited static supervision can meet the requirement of solvency assessment, while DST can do.Subsequently, this paper discusses the concept and operation process of scenario analysis which is the theoretical basis of DST and by using DST in policy analysis, this paper shows how DST works in analyzing different situations in future to achieve the goal of warning.The paper put an emphasis on choosing condition when using DST in china's life insurance company, and gives some suggestion in that partial, basic assumption when using DST. Designed a series of related indicators according to fortune of DST, and uses SPSS do some partial correlation test, then tries to do empirical studies on varieties of scenario assumption which are chose to give solvency warnings in china's life insurance company.At last, on basis of former analysis and the result of empirical studies, related strategies have been raised to give some advice to the life insurance supervisor and managerial class.