Operations Of Insurance Companies Based On System Dynamics Simulation

Since the implementation of reform and open policy,The property insurance industry in our country has developed greatly. The importance of property insurance industry in national economy is well known to people. However, because the time of taking up the property insurance industry is not long enough, there are still many problems existing in the operation of property insurance company. Reasonable operation plan of property insurance companies is not just their own needs to improve economic benefit, but also the needs of national industry to struggle for existence. In the economic society full of rapid developments and risks, the strategic significance of property insurance companies'operation has become more and more prominent.For the distinction of operation between the property insurance companies and the general companies, the operating system of property insurance companies will be divided into several system,including human resources, insurance premiums, reinsurance, finance,profit, fixed assets ,cash flow and other subsystems.Through the mutual influence of the sub-systems, the entire operating system will be consequently influenced by useing the research tools of system dynamics and Vensim modeling software to model and simulate the operation of the property insurance companies from the idea of system theory. Through the simulation,the internal character and status of development of the property insurance companies will be revealed.The simulation model could dynamically simulate the operating of the property insurance companies to provide a reasonable reference to the business decision-makers. Taking the data of YG Property Insurance Company for a sample to test the effectiveness of the model and simulate the operating condition of the companies in a certain period of time. The simulation will include balance sheet, income statement, cash flow statements, human resource profiles, dynamic changes in insurance premiums, the solvency trends,etc.The innovations of the paper is that a combination of quantitative and qualitative research methods, and dynamic property insurance companies'operation simulation to provide appropriate policy recommendations to the decision-makers.