| Life insurance companies'profits mainly come from insurance business and investment business. However, in recent days the profits from insurance business decline sharply or even suffer a loss. By contrast, the profits from investment business is gradually becoming a major growth point. Based on insurance investment theories home and abroad and related international experience from developed countries, this paper analyzes the current situation and existing problems of investment proportion of China's life insurance funds and studies the case of China Life. By applying the non-linear programming method and the modern portfolio theory, the paper establishes the optimal investment proportion model by importing risk preference coefficient and carries out the optimal investment proportion. Then the paper compares the results of the model with the practical investment proportion of China Life. The study finds out that the practical investment proportion in bonds is almost the same with the theoretical results, while proportion in bank deposits lower and proportion in equities higher. The study also shows that the investment portfolio of China's life insurance funds companies stays in a low risk level. Finally, the paper raises policy recommendations that will improve the use of life insurance funds. |
PDF Full Text Request