Insurance Investment Funds, Capital Market Intervention Studies

Liability business and assets business are two cores for the operation of the insurance company, any failure of which business is detrimental to healthful development of the insurance company. Because the liability businesses have relative high transparency, the various coverage have overlapped, and the capacity is relatively surplus, therefore, there is limited space for us to increase the profit of the insurance company by improving the liability business. Recently, some insurance company from abroad has even negative capacity profit. In some degree, the profit of the insurance company comes mainly from the more part that portfolio interest rate has over the scheduled interest rate. The liability business has done much to finance. While, the insurance company in China gets profit almost wholly from the capacity profit, because its portfolio interest rate is lower than scheduled interest rate. The seven time decrease of the deposit interest rate since 1996, which widened the gap between the portfolio interest rate and the scheduled interest rate, brought great hazard for the operation of the insurance company, and put big pressure on the capacity business of the insurance company. With China's entry into the WTO, the insurance company is faced by the intense competition from the world. According to the agreement between the china and America governments, there is limited space left for the insurance company at home, let alone the faster and faster pace of the opening of insurance market. Under these pressures, the Chinese government loosens the constraint for the investment of the insurance company, especially for the entry to the capital market of the insurance capital. First it was prohibited, then allowed a little part of security investment fund to come into the market indirectly, and latter broaden the scope and widened the choice of the investment vehicle, lastly, it is allowed to come into the market directly under the supervision of government. After recognizing this tendency, knowing the past, the present and the future of the insurance capital, we can found an efficient security investment system. This is very important, and it's also the aim and importance of this essay. Capital's invest into the capital market has been proved by many countries in the world. While in China, the insurance capital has a big scale, and the capital market has its development prospect, all these have encouraged me to probe the way to solve the low investing profit by the way of entering the capital market and connecting the two capitals. This essay analyzes the situation and problem of the insurance capital, the capital market and the entry of insurance capital into the capital market. At last, I made a new investing model. This essay has four chapters:Chapter 1 put out that investing in the security market is the trend of the insurance capital investing. First of all, I analyzed the resources of the investing of insurance capital. The resource and the ratio of the capital are the precondition of the insurance investing. In perfect liability-assets management, the different resources of capital consist of the funds, which are under different limits by the law. With the restoring of insurance business, the scale of insurance investment fund increases quickly. The balance of the national total insurance investing capital has been 246.1 billion RMB by the end of June of 20000. It's partly because that the insurance business developed quickly, the total capital increased quickly, partly because that the use of the fund has been improved. So big a fund is demanding the proper investing, while the Chinese capital are used to insure the safety by depositing in the bank or buying government debt, the investing efficiency is very low, and the gap between the investing interest rate and the scheduled interest rate is very big. The trend for profit of the capital, the competition and some new exploit of business are requiring the entry of the insurance capital into the capital market. By analyzing the different investing port...