A Study On The Solvency Of China's Non-life Insurance Companies

The solvency of insurance means insurance company's ability of economic compensation to the insurance responsibility undertaken. Non-life insurance companies are the primary object of solvency supervision. There are so many facts that influence the solvency of non-life insurance companies, which include macro and micro facts. The primary influence facts need to be analyzed in order to ensure the prerequisite solvency of non-life insurance companies. Based on qualitative analysis of non-life insurance company solvency and its influence facts, grey relation analysis model and excel statistical analysis soft are applied in the quantitative analysis of micro influence facts. Then the writer put forward a comprehensive evaluation index system of solvency. PCE model and spss 10.0 statistical analysis soft are adopted to analyze solvency, together with non-life insurance companies' financial data from 2000 year to 2004 year. The research shows that the solvency of domestic company is worse than foreign company evidently. Primary reasons as follows: On one hand, many domestic companies, especial state-own companies, have advantage in market seize that is caused by administrate deploy. But the advantage will be weakened or cleared away following China entrying into WTO and the insurance market opening deeply. On the other hand, due to various mechanism reasons and under emphasis on solvency, the picture is deteriorating constantly. To improve the solvency of Chinese-invested non-life insurance companies, the real issue is to secure capital funds, optimize assets structure, increase profitability and emphasize cost control and so on. Meanwhile, the management on solvency of non-life insurance companies should be strengthened from the angle of insurance regulatory institutions so as to boost the sustainable and sound development of China's insurance sector after entry into WTO.