Study On Risk Management Of China Insurance Holding Company Under Mixed Operation

With the development of reform and opening and financial industry, the interpenetration tendency of insurance, banking and security is more and more obvious. As Financial Mixed Operation approaches, the step of our insurance participating in mixed operation is more and more fast.For the reason of history and by comparison with the close supervision of banking, China is tolerant to the attempt on the insurance business participating in mixed operation, and china's insurance has a longer journey than banking in mixed operation. China's insurance brings up the eight insurance holding groups in financial reform in early 21st century. Therefore, the venture management under insurance holding groups mixed operation is an emergency.The thesis first reviews the history of Financial Mixed Operation in twentieth century China, analysis the failure of the China's early Financial Mixed Operation. The result suggests that in the early period of China's reform and opening-up low level of economic development, law and financial regulation made China's early Financial Mixed Operation ended up with chaos, inflation and bubbles. With the later established Financial Separate Operation maintained financial order and prevent financial risks, China financial industries received healthy development. The implementation of financial law and financial regulation, the establishment of financial Modern enterprise system makes China reentering Financial Mixed Operation possible.Base on the characteristics of Traditional insurance, the returns of China insurance companies are lower than commercial banks and securities companies. China insurance companies are eager entering non-insurance financial business.The thesis analysis the related party transactions risks, systemic risks and regulatory risks, for which china insurance holding companies would encounter under Financial Mixed Operation.And then the thesis use hypothetical mergers between insurance companies and banks and fund companies to analyze the potential risks and returns of the financial integration in China. Data from twelve insurance companies, thirteen commercial banks and twelve fund companies be used to create hundreds of virtual financial companies, author analysis the Return On Equity and Rate of Bankruptcy of the virtual financial companies to find out the feasibility of insurance companies enter other non-insurance financial business. The result of the hypothetical shows that insurance company enter bank business can improve profit and reduce risk, but enter securities business will increase the probability of bankruptcy.From a risk management point of view, the thesis suggests China insurance holding companies should strengthen the guard against the risks of stock market. China insurance holding companies should also improve corporate governance structure. The current Financial Separate Operation should be adjusted to better adapt to the need of the the transition period from Separate Operation to Mixed Operation. As soon as possible legislation on the financial holding company, better normalize the existing Financial Mixed Operation business.