Assessment And Countermeasure Research On The Solvency Of Life Insurance In Our Country

Solvency is a life insurer's financial capability to pay its obligations under policy commitment. It is the principal index of insurance supervision, and also is a important contant of risk management for life insurance companies. Because of the characters of production, the trait of management and the special market structure, not only benefits of business owners and operators, but also social stability and economic development may be influenced in case a life insurer's solvency collapses. While our life insurance industry has developped consistently with high speed, solvency risk should be payed attention. Therefore, we analysize details of life insurance industry and review some existing literature and research results. Besides, the study also seeks ask for several shortages of supervisory index. On the basis of above-mentioned all work done, combined influence factors, we try to construct a set of index system in order to assess the current solvency by means of simulating index system of American CAMEL-S rating. Subsequently, through applying it to the research, we find out what questions solvency exists at present of life insurance company and how we can resolve them.This article's structure has approximately three parts:In the first part,we elaborate theoretical principles about assessment of solvency and analyze status que of solvency together with Chinese supervision with regard to life insurance company. Then referred to supervisory ratios, we carry on a contrast analysis and find out our disparity between Chinese and American by the comparison of solvency's superivision on life insurance company.In the second part, in view of influence factors, by simulating CAMEL-S index system of America, we try to construct a set of synthetic evaluating index system which includes asset's quality and liquidity, the level of management and operation, profitability, the adequacy of capital and reserves, the market sensitivity .Secondly, the study adopts factor analysis to illustrates the change of solvency of life insurance operation with the date of Chinese main life insurance company and the status que of 23 companies in 2004, and points out some questions which exist at present. This part also is core part of this thesis. What's worthy of mention, this study also introduce several kinds of statistical method to achieve the good appraisal effect. For example, factor analysis method is used to withdraw the main factors; Cronbach's alpha is used to confirm the reliability of the main factor; the fast cluster method and a simulation of the CAMEL-S rating also is used to classify life insurance company and so on.In the third part, according to above contents and conclusions, the study puts forward some correlative proposals and countermeasures. Seven important aspects are expounded: enhancing recognition of executives, enriching reserves reasonably and scientistically, carrying on product innovation, reinforcing investment management, reducing surrender rate, ascertaining reinsurance reasonable proportion as well as the consummation of supervisival mechanism in connection with Chinese life insurance company.