| Paul M Theil, expert of investment bank from Morgan Stanley Company, has said: "Investment is the core operation of insurance companies. If there is no investment, there is no insurance business. The existence of insurance industry lies in transference of risks while the premium is the price of risk transferring. But for reason of the severe competition in insurance market, the price cannot afford the cost of transference. So, if there is no insurance investment, the operation of the whole insurance industry could not be maintained." Both of underwriting and investment play equal important roles in operation of insurance companies in developed countries. But in China, investment has always stood a subordinate status under the strict restriction on investment issued by the government regulator. Most of the insurance funds were deposited in the commercial banks with very low interests. With the continua declination of bank interests, the insurance funds had suffered great losses, which will result insolvency of the insurance companies in the future. It is urgent for the regulator to broaden permitted investment channels and for the insurance companies to improve investment profit by strengthening risk management on investment.But what we must realize is the difficult situation facing the regulator when making policies of insurance investment. On the one hand, the incomplete investment environment is insecure for vast and unstrained investment by the insurer; on the other hand, insurance companies lack of necessary management ability coping with the variable risks of investment efficiently.The following dissertation tries to resolve the latter problem by constructing the complete system of risk management on insurance investment (the System). The System aims at managing risks with the most economic and reasonable methods or tools on the basis of discerning,analyzing,measuring and evaluating risks of insurance investment.The three-chapter dissertation can be separated into two major parts in structure. The first part is basic analysis on the risk management of insurance investment, while the second part focuses on constructing the System. The first part is necessary preparation for the discussion of the second part: core of the dissertation. The chapter one is constituted of three sections. The first section includes mainly concept defining and discriminating. They are concepts of insurance investment, and risk management of insurance investment. The second section of chapter one introduces the target and content of risk management of insurance investment. In the field of investment, where there are profits, there are risks. So, as I will emphasis many times in the dissertation, the target of risk management does not lie in eliminating risks but in reaching the balance between risks and profits. That means try to get the biggest profit within the fixed risk levels or come to the least risks following the fixed profit standard. The content of the System is controlling investing risks by ways of discernment,analysis,measurement and evaluation of risks under effective organizing.Both of the second chapter and the third chapter are focusing on constructing the system of risk management on insurance investment. As the basis of other risk management operations, the analysis and measuring of investing risks are discussed in an independent chapter: chapter two. The most commonly used tools in investment are securities investment,estate and business loans. So the discussion on investing risks is also spread out around these common tools. The risks facing all these tools can be generally divided into two kinds: system risks and non-system risks. The latter one concerns with individual invested object, while system risks which exert impaction on all participants in the market always include risk of market prices,risk interest,risk of purchasing power and risk of foreign exchange. The dissertation will emphasize more on quantitative analysis instead of qualitative analysis, which most of the... |
PDF Full Text Request