Empirical Studies Of China’s Property Insurance Company Solvency

Insurance company as one of the three major financial institutions, has the functionsof managing risk and stabilizing the economy, and plays an important role in the nationaleconomy. The security and stability of insurance companies is important to policy holders,insurance companies and national economy. Since China resumed Insurance, the premiumincome and the proportion of national income are high growth year after year, and theinsurance industry is one of the most development potential in China industry. Comparedwith life insurance, although the property insurance business accounted for a small share ofthe insurance market, the speed of growth is fast, the proportion of the insurance premiumincome is larger, and the space and development potential of the property insurance marketis huge.The financial crisis of2008has brought great impact to national financial institutions,and many internationally renowned insurance group solvency had crisis or even wentbankrupt. The ensuing Euro debt crisis has further brought the insurance industry tocombat. In the face of an increasingly complex economic situation and internationalenvironment, national financial regulators are examining the introduction of a newregulatory system. To insurance industry, solvency is the focus of regulation. Insuranceregulatory authorities of the world’s major countries and international organizations areactively seeking new solvency regulation mode. China should also learn from internationalexperience, based on national conditions, to accelerate the construction and improvementof the system of solvency regulation.This article is divided into four parts: The first part introduces the researchbackground, the main structure of the article and literature review. The second partprovides an overview of the related concepts of solvency and solvency regulation,contrasts the major international solvency regulatory model, analyzes the internationaltrends and the Enlightenment to China, and analyzes the current situation of propertyinsurance company solvency and its regulatory in China. The third part is the empirical part. This part uses comprehensive model law, and selects15funded and foreigninvestment property insurance companies financial data for2007-2011. This part studiesproperty insurance company solvency impact factors with factor analysis method, andcontrasts the solvency of funded and foreign investment property insurance companies.The empirical results show the gap with funded and foreign investment property insurancecompanies in terms of underwriting management and asset structure. The fourth part,according to the previous analysis and empirical results, makes recommendations toimprove our property insurance company solvency from four aspects: underwriting,investment, financing and regulatory system.