Discussion Of Risk Management And Securitization Of Insurance Companies Operating In China

Operation risk management in domestic insurance companies is a good subject to be studied. At present, most of domestic insurance companies focus on grabbing more market shares, and they think the more liability, the better! They seldom give attention to the investment return of company shareholders, to the protection of insured interests and to the strategic development of their own company. So all these thoughts translate into the chaos of operation management practices in domestic insurance companies.In order to make domestic insurance companies aware of a good operation risk management, this paper strictly define three objectives: profitability, security and liquidity for operation risk management of insurance companies at the beginning of the dissertation, after introducing the concept of risk management, as well as the content of risk management.There are 4 chapters in this dissertation. In the first chapter, we explained the reason why we should select this subject, the contribution of the research, the methodology of research and the whole structure of the paper. In the second chapter, we discussed the basics of risk management in the operation of insurance companies with the emphasis put on the objectives of risk management. a case study was introduced here,analyzing the three objectives respectively and the interrelationship between the three. The thoughts we held in this paper were justified in the case study. This means that the research above was very useful for operation risk management of domestic insurance companies.After setting up the right management objectives,the paper went to the risk analysis of operation of insurance companies. In the third chapter, the paper analyzed the main and specific risks the domestic insurance companies are facing. The function of re-insurance in dealing with these risks was also discussed here. The purpose of the risk analysis is to make preparations for the insurance risk securitization analysis in next chapter, and also to help domestic insurance companies assess risks existing in their operation.Risk management comes after analyzing the risks. Securitization is a new tool to manage the risk, and also a new way to bridge the capital market and the traditional insurance market. The following research focused on the analysis of insurance risk securitization,recently prevailing in abroad insurance industry,in order to find the applicability in transferring or managing the risks the domestic insurance companies are facing. So on the basis of risk analysis in the third chapter, the fourth chapter analyzed the securitization of insurance risk, and its applicability and feasibility. There are six subchapters in this chapter. The first subchapter focused on ①the rationale of insurance risk securitization through the example of catastrophe risk securitization; ②the structure of insurance risk securitization, mainly explaining the subjects and their functions in the transaction respectively.The second chapter discussed the function of securitization in dealing with or transferring the risks discussed in the third chapter.The third subchapter compared securitization with re-insurance and the fourth subchapter compared securitization with the other approaches of risk financing. Here we only discussed the advantages of securitization as opposed to traditional risk financing approaches in order to justify the existence and further development of securitization.The fifth subchapter is about the current status of securitization. There are 2 parts in this subchapter. The first part is about catastrophe risk securitization. Catastrophe securitization is the earliest insurance risk securitized, and as a result all other insurance risk securitizaiton is based on it. Life insurance securitization was analyzed in the second part, which is still under intensive research and study abroad. Because all the research in this part is based the research of asset securitization in other fields, we at the beginning of part introduced asse...