The Study On Life Insurance Solvency

Solvency is a life insurer's financial capability to pay its obligations under policy commitment. It is the principal index of insurance supervision, and the important content of risk management for life insurance companies. Because of the special characters of managing risk and 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. As the sparking industry, while our life insurance industry has developed consistently with high speed, solvency risk should also be paid much more attention. Therefore, it is an urgent task for insurance supervision department to reinforce solvency supervision. As the beginning of insurance supervision, it is of both high theoretic and practical significance to evaluate current solvency of insurance companies and find out potential problems by resorting to designing a set of indicators of solvency. In view of these facts, this paper analyzes the details of the insurance industry in our country and reviews some existing literature and research results, combined with the study of influence factors of solvency and the supervision indexes given by CIRC (China Insurance Regulatory Commission), on the basis of all the work mentioned-above done, we construct a set of indexes evaluating insurance solvency, furthermore, the application of Factor Analysis and Grey Fuzzy Synthetic Evaluation in analyzing solvency, makes the study more reasonable and objective. In the end, the thesis gives some advice for current solvency shortages, which is beneficial to both insurance supervision department and life insurance decision department.