The Interactive Relationship Between The Development Of Stock Market And The Investment Of Insurance Fund

Investment banker Paul M. Theil asserted that, investment is the core business of insurance, insurance can not survive without investment. Due to the high speed development of recent years, insurance in China has accumulated a huge amount of capital, which is now creating great pressure for investment on insurance industry. To reduce the pressure, Chinese government permits insurance companies to invest in stock market. Admittedly, insurance investor may have higher return in stock market; moreover, insurance fund could give powerful drive to stock market. However, for its risky nature and existing illegal transactions, such as "dealer manipulation", "price movement" and "Heading behaviours", insurance investor would have to face higher risk if invest in stock market; and as institution investor, insurance might also manipulate stock market by backstage deal, which could cause damage on small& middle shareholders.Since so far in China we still lack of experience and relevant research about interactive relationship between stock market and large institutional investor like insurance company, in this paper I would like to illustrate my point for approaching a win-win solution for the insurance investment in stock market by analyzing investment structure of insurance fund in U.S.A, England, and Japan.The structure of this paper will be, in the first chapter, from the source of insurance fund and the principles to exert this kind of capital I proved that multi-channel investment is essentially important to insurance fund; in the second chapter, I analyzed the risks of insurance investment in stock market; in the third chapter, I analyzed the investment model of insurance companies in U.S.A, England and Japan, then summarized important lessons we should learn and found out the model which fits the economic situation in China; at last, in the forth chapter, I illustrated my point for optimizing interactive relationship between investment of insurance fund and stock market.