The Analysis Of Financial Sustainable Growth For Listed Life Insurance Companies

As the fast development of capital market and economic globalization, our insurance industry has entered the 30 years and we got many achievements in these years. On one hand, the players are becoming more and more, we having more than 110 modern corporate bodies from the beginning to now; on the other hand, our insurance products are increased; the risks of the business are still increasing. At the same time, our insurance supervision also gradually moved toward the stock rail. In 2006, the national insurance premium is 564,140,000,000 Yuan, growing 14.4% compared to the same period,2.2 percentage points more than last year. In 2007 year, the gross is 703,580,000,000 Yuan. It raised 25% comparing the same period. In 2008, the gross received to 978,410,000,000 Yuan, growing 39.1% compared to the same period. It has been quickest one year since 2002. In 2009 year, our insurance premium income amounts to 1,113,730,000,000 Yuan, breaking 1,000,000,000,000 critical junctions for the first time, growing 13.8% compared to the same period and the insurance company total assets break through 4,000,000,000,000 Yuan. In 2010, our insurance premium income gets tol, 452,797,000,000 Yuan, growing 30.4% compared to 2009 year. And the total assets come to 5,048,161,000,OOOyuan. This explained that our country insurance business is in a fast rise time.In recent years, the scholars at home and abroad do many studies on how to make sustainable development a wealth. We give more focus on sustainable growth in the finance and sustainable growth model, which involves four variables: sales margin, total asset turnover, equity multiplier, and retained earnings rate. Eventually, Robert·C·Higgins from the United States defined sustainable growth rate as a formula. The sustainable growth rate= net profit margin* total asset turnover*equity multiplier* retention rate. And the actual growth rate of operating income=Final/Initial operating income -1. The two different ways of making the calculation showed numerically different. The sustainable growth rate is approximately equal to the actual growth rate is the ideal situation what we want to achieve.This paper is about the theory of sustainable growth and sustainable growth. In development of capital, to ensure the competitiveness of enterprises is an effective way in a long-term survival for all enterprises. The same is true for life insurance companies in the process of rapid development, which can not do without financial support. The growth in the financial is the amount of funding for the expansion. Life insurance sales expanding will cause an increase in premiums receivable, debt increases. Because there is always the risk of claims, and therefore we need more stable funding to support the normal operation of enterprises. To ensure stable growth businesses, companies need to find a financial balance between operational efficiency and financial sources. The enterprise should prevent a mismatch between the financial resources and insure there being a insufficient solvency to meet the financial crisis. Typically, the company will give the advice to the next year, combined with the overall operation of the economic environment for the next year’s sales and management to make certain plans. In the good time, high sales growth, issuing new shares, dividends, etc. will be as a concrete means to ensure the implementation of the annual plan. However, these specific objectives can not all consistent. We can through in-depth analysis to be better in marketing, finance and management and make more informed decisions. Through a comprehensive understanding of the theory, we put forward the connotation of sustainable growth of life insurance companies. Life insurance companies are to maintain a minimum solvency in the premise, endogenous capital and reserves to support a variety of insurance sales growth in the growth of a special way.Secondly, we give a comprehensive analysis about the situation of sustainable growth by operating life insurance companies for the importance of life insurance companies. To illustrate this problem, the article describes the three companies listed development status and financial situation. The paper also mentioned the company’s operating efficiency, operational risks of the life insurance company. We analyze the characteristics of enterprise which determine the sustainable business development.At the same time the insurance business also need to increase sales growth and financing needs, under the premise of ensuring the solvency of financial stability, in order to guarantee the normal operation of its business, and promote healthy development of enterprises.Again, we take an example of China Life, using the model of Higgins, which is the current widely accepted model, to explore the sustainable growth in financial support for sustainable growth issues. We establish the financial goals and methods of sustainable development. We make a comprehensive analysis of its operating conditions in recent years to explore how a company restructuring and changes in business strategy to gradually move towards sustainable development. We give a comprehensive analysis on the insurance company factors and sustainable growth issues.Finally, this paper concludes through case studies, proposed a reasonable financial strategy through the development of the insurance company to make long-term development planning. We should give a correct view of the sustainable growth rate and the difference between the actual growth rates. But any business can improve the blind pursuit of growth, while ignoring the sustainable growth rate. The most important thing is the company’s own make some analysis of operating efficiency to meet the rapidly growing demand. Also, focusing on the company’s own analysis of operating characteristics, are suitable for any company is not diversified business strategy, we should find the right insurance products and determine their core strategy. At the same time, an analysis of the economic environment is important. We should give high focus on the interest rate risk and high sensitivity factors.In this article, we have five sections to analyze our problem:The first chapter of this article, we briefly introduces the study purpose, the meaning of research and study the status, the content and methods.The second chapter is theory for this paper, detailed information about the meaning of sustainable growth and the relevant model. We talk about the relationship among financial industry, sustainable growth and development, at the same time, further analysis of the life insurance company finance sustainable growth and the impact factors. So we give the theory about the life insurance business sustainable.We analyze the importance of the company’s finance sustainable growth, in chapter 3. We introduce about china’s insurance market players, business and market development. We also find some questions in the 3 listed life insurance companies, and analyze the factors.Further, we take an example in chapter four. Based on the model of Robert Higgins finance sustainable growth, we study the situation of China Life and calculate the actual rate of growth and sustainable growth rate in these years. Also, we discuss the factors and reasons. Based on the results, we give some advice.Chapter 5 for the summary in this paper, we talk about the insurance company’s financial strategy for sustainable growth and research the situation of corporate finance sustainable growth.The main contribution of this paper is to promote life insurance companies to have a correct view of financial situation and help them develop financial strategies to ensure a reasonable life insurance company’s long-term healthy development. At the same time, the main deficiencies are:lacking of data sources, we selected listed insurance company, but there just three bodies. So the information is not complete and it will make the result of an impact. In addition, many views of this paper are built on the basis of sustainable development theory, which with a certain and reasonable. But there still has a gap between companies and management, which would make the use of sustainable growth are subject to certain restrictions.