Insurance Company Investment Strategy And Portfolio Research

How to use insurance fund is always very important to the development of insurance industry. Whether the insurance company can succeed in the competitive market and achieve the sustainable development depends on the rate of return. The investment of insurance fund is restricted with various economic and social conditions. Generally, we hardly achieve the balance point between security and proceeds.According to the characteristics of self-possessed fund, we discuss risk management measures and research investment portfolio model based on corporate finance and corporate governance theory. Our research breaks through the limits of traditional insurance investment strategy and conducts an empirical study on Ping An Insurance(Group) Company of China. We can optimize insurance company's investment strategy and investment portfolio and increase the rate of return through our researching.We examine present conditions of insurance investment and find that investment scale grows fast whereas the rate of return keeps lower level. The leading reasons are as follows: (1) the limit of investment portfolio; (2) the lack of investment experience; (3) the immature of capital market in China. During the development of capital market and regulatory policy, we would have multiple choices of how to invest insurance funds. Changing in the profit pattern and increasing in the rate of return, we definitely face more challenges of risk management. We divide present investment objects into eight categories and choose Deposits, Treasury Bonds, Debenture, Securities Portfolio Fund and Stocks to build investment portfolio model. Also, we propose the suggestions about management and regulation.Part of empirical research in this paper, the assumption that conditions are as follows: the decision is based that in order to guarantee a certain yield level of risk minimization as the goal set up the portfolio model, through the identification of model variables numerical effective portfolio. First of all, we need to calculate the rate of underwriting income and the ratio of the use of funds; then determine the rate of return of investment instruments; Finally to calculate the yield of the risky assets and the underwriting yield covariance, and to calculated effective portfolio will via inputting variable data into the insurance portfolio model. Then according to optimal portfolio theory to determine optimal portfolio. To compare the theory of optimal portfolio with the study of the actual ratio of investment.Our conclusions include: (1) insurance investment will invest in more extensive objects and securities investment will occupy the important share; (2) The ability of risk control will be one of core competencies for insurance companies; (3) Insurance companies should pursue minimum risk meanwhile ensure reasonable rate of return. Based on these conclusions, we further provide the proposal of investment strategy and portfolio.