Study On The Interest Rate Risk Of Life Insurance In China

Since 2007,the financial crisis sweeping the globe,the world economy into a downturn. the prevention of financial risks has become a worldwide topic, pays people more and more attention. As an industry operating risks, life insurance is not only full of the same risks with other industries, but also facing the special risks determined by its own operating characteristics in its operating process. Due to the uniqueness of the life insurance product pricing mechanism, the long-term nature of the huge debt and the option in the police, these determined that the interest rate factor in the life insurance business throughout the entire process and interest rate risk is no doubt one of the largest risks in life insurance industry. In particular, as China's market-oriented interest rate reform, the life insurance industry will inevitably face the impact of interest rate risk caused by frequent fluctuations in interest rates. Fluctuations in interest rates will trigger a potential threat to the growing prominence. Therefore, we can only conduct an in-depth study at this stage of the formation mechanism of interest rate risk in Chinese life insurance industry and a quantitative analysis on the adverse impact of the life insurance industry also can be a positive response to proposed effective risk management measures. And it will be helpful for the Chinese life insurance industry to develop steadily and healthily.In this paper, it starts with the use of static analysis methods from the operating characteristics of life insurance companies to illustrate the characteristics of life insurance companies determining the interest rates throughout the entire process of life insurance business; Secondly, it analysis our country's life insurance companies currently facing interest rate dilemma and empirical analysis of the formation mechanism of interest rate risk, the current situation of interest rate risk China's life insurance industry faced and the reasons behind the deep-seated; then, it simply describes the application of the principle of all kinds measurement tools, the advantages and disadvantages of interest rate risk of life insurance industry, and starting from actuarial pricing of life insurance products focuses analysis the specific application of VaR methods in the life insurance companies of China's interest rate risk measure; Finally, it puts forward the interest rate risk selection our life insurance companies faced from life insurance products'perspective and the perspective of life insurance companies management. On this basis, put forward a number of strategies to be explored for our country's less than perfect financial markets. This paper aims to provide our country's life insurance companies with feasible and operable effectively response to interest rate risk.