Study On Management Of Interest Rate Risk In China's Life Insurance Companies

Because of the particularity of the life insurance, the interest rate risk management is count for much to the life insurance company. China has become a member of the WTO for 5 years in 2006 and the insurance realized basic openness to the world. There are more and more investment and financing tracks for Chinese insurance company to improve their competitive ability gradually, which bring larger risk to the insurance at the same time. So the dissertation analyzes the interest rate risk to the life insurance at first, then discusses how to keep away and control those interest risks and puts forward some policy suggestions at last.Currently, research on the interest rate risk of Life Insurance Company is mainly focus on how the change of interest rate influences the life insurance company's loss in China. However, the dissertation discusses the interest rate risk faced by the life insurance company from three aspects of pricing, investment and financing, analyzing the forming cause of various interest rate risks and their manifestation respectively. At last, the dissertation points out the necessity of the interest rate risk management and put forward several methods of guarding against and controlling interest rate risk.The dissertation considers that the interest rate risk of pricing of insurance product are the loss caused by predetermine interest rate higher than the market interest rate in long time and the decrease of portfolio caused by predetermine interest rate lower than the market interest rate. The interest rate risk of life insurance Company's investment is the depreciation of assets because of the fluctuation of interest rate. The source of interest rate risk of life insurance Company's Subordinated Debt financing is higher anticipant yield. We should use diverse methods to evade and control interest rate risk because of their characteristic. We could design new insurance product by duration-immunity strategy, build a model that the property structure and the liabilities structure matches mutually to decide how to invest in domestic and use different kind of finance derivatives to avoid interest rate risk overseas.