Research On The Feasibility And Countermeasure Of Reverse Mortgage Development In Chinese Insurance Company

According to the sixth national census results, the number of Chinese who is60years old and above accounted for13.26percent of China’s total population, whichmeans China has entered the aging society. Differently, China is in the case ofgetting old before getting rich, which means its economic strength is still too weak todeal with the aging problem. This made China’s basic old-age insurance system in alow level and narrow coverage, which can not meet the needs of the old people. Atthe same time, the family structure miniaturization and empty nest households leadto the weakening of traditional family pension. Therefore, searching for a newsupplementary pension mode is imminent.With the economic developing, China’s homeownership rate increased, butbecause housing is real property, the transaction is more difficult to realize, which isnot like other financial assets that can be used to pay old people’s living and medicalexpenses. The launch of the Reverse Mortgage Loan, realize the assets in thecondition of not changing the homeowners’ living conditions and provide a way tothe Housing Endowment who has ownership of a house but lack of cash income.Housing reverse mortgages is a financial innovation tool. It can serve as animportant complement of the social pension insurance.Reverse Mortgage loans have a greater risk than other financial products, asinsurance has the function of risk diversification, it would become an important partof the operating chain. China’s insurance company products little differentiation andthis innovation can become an inefficient way to solve the problem. Developing reverse mortgage insurance can effectively lead to innovation, economicdevelopment and social construction.The domestic scholars focused on the research of product introduce and socialeffects and ignored the risk and supply&demand factors. They also failed tohighlight the dominant position of insurance company. This paper attempts toanalyze the feasibility of China’s insurance industry to carry out the ReverseMortgage loan using qualitative and quantitative methods from three angles whichinclude the risks, supply and demand. Provide new ideas to ease the pressure on ourpension.In this paper, a combination of theory and practice research method is used.Chapter1describes the research background and significance, come up with theideas and methods of this research on the basis of summary of commentary on theresearch of scholars at home and abroad.Chapter2involves the concept,characteristics and necessary of housing reverse mortgages. Chapter3describeshousing reverse mortgage operation mechanisms in the foreign operation practice,and then it analyzes the advantages of insurance company to carry out this businessand the position of insurance industry in the business. Chapter4analyzes thefeasibility of reverse mortgage and forecasts the prospects of housing reversemortgage market. Chapter5analyzes the risks of reverse mortgage and proposesmeasures from the perspective of insurance.