Analysis And Precaution Measures On Life Insurance Company Solvency

Insurance solvency is the ability to reimburse the applicants who have suffered economic loss. There are various risks in the insurance industry. But all these risks will end in shot of solvency. To let the insurance companies have necessary solvency in their continuous operation is the government's key target of regulating the insurance industry.On the basis of elaboration on the basic concepts of solvency, factors that influence solvency , solvency management and current situation of life insurance solvency, according to the ratio system promulgated by China Insurance Regulatory Commission, this dissertation selects 9 financial ratios with the data of China's main insurance companies and adopts factor analysis and the statistic software of SPSS to illustrate the solvency of China's main insurance companies. Factor analysis shows that the main factors influencing solvency are insurance scale and profitability, assets structure and composite cost rate. This analysis involves implications on how to improve the solvency.In this paper, we make a further analysis on the reason of insufficient solvency of the China's life insurance company: life insurance funds use low-yield, and the solvency seriously affected by interest rate changes. Therefore, the key point to improve the life insurance company solvency is to replenish the capital funds as well as to improve the profitability of the company, to strengthen supervision and improve the solvency of the insurance company's operating management level.