Research On Asset - Liability Management Of Life Insurance Companies In China

As the environment, especially the finance environment change, the improperly price level and a great deal of bad investment assets in life insurance company lead the mismatching of asset and liability and the mismatching of cash flows, that make the asset and liability management fail, even can cause the company bankrupt. In abroad, life insurance companies begin to recognize the asset and liability management as an effective tool for risk .management after so many life insurance companies bankrupt. Currently, there have the same problems in life insurance companies of our country, especially the interest loss. It is urgent for life insurance companies to carry on effective asset and liability management, so that it can match the asset and liability of life insurance company, and keep the management steadily.This paper systematically introduce the theories of asset and liability management, analysis the problems of asset and liability management in life insurance company of our country, put forward the appropriate asset and liability management model and design the system. This paper can be divided into four parts:In the first part, we analysis the reason that the foreign life insurance companies fail first, then introduce the characteristics of life insurance company's assets and liability and introduce the development of asset and liability management theories, called asset management theory- liability management theory- asset and liability management theory.In the second part, it introduces the main theories and measure techniques of asset and liability management. The main theories contain gap theory, cash flow matching, and immunization. The main measure techniques contain flexibility testing, cash flow testing, dynamic solvency testing, risk based capita, and financial condition report.In the third part, we carry on detailed of analysis the problem of asset and liability management in life insurance company of our country, include the serious interest loss day by day in our country, the problem in the course of the utilization of fund in life insurance company, and the mismatching of the asset and liability. On the base of that, we continue to analyze the reason of the asset and liability management problem, include objective and subjective, while the more important is the subjective reason. Life insurance companies in our country do not have the effective measure to resist risks, so the effective asset and liability management system must be established in life insurance companies that can well match the asset and the liability of our life insurance companies.On the basis of the third part, in the forth part, we first put forward the asset and liability management model that suit the life company in our country according the situation that we developed. That is a model which combines asset-driven asset and liability management model and liability-driven asset and liability management model. Then we preliminarily build up the organization frame of asset and liability management. Finally, we give some policy suggestion to the asset and liability management system in our country from the administration level and the company level according the development condition of asset and liability management in our country. That can have contribution to the implement of the asset and liability management system in effect and will be avail to resist the exterior risk that exists through the course of the company management.