| Under the conditions of market economy, the growth of enterprise value is the goal of modern business, but there will be a variety of natural disasters and accidents in the course of business, which may cause serious financial crisis, so that the enterprise value growth becomes difficult. Therefore, risk management plays an increasingly important role in corporate strategy and business management, and risk management can increase enterprise value. As a financial means of risk management, insurance is regarded as a means to avoid the risk for most of the enterprise. Part of the risk will be transferred to the insurance company by paying insurance premiums so as to ensure its continued and stable operation. In recent years China’s insurance industry develops fast, the average premium grows more than15%from2000to2012, it’s higher than the growth rate of China’s GDP. Insurance has become one of the fastest growing sectors of the national economic growth.As an individual. Enterprise can be divided into three kinds according to their risk preference:risk aversion, risk neutral and risk preference. To the high concentration of shareholding enterprises, it is similar to personal preferences, and it belongs to risk aversion. For other companies, they are risk neutral. Mayers and Smith had explained seven motivations why enterprises need insurance, he pointed out that insurance policies of enterprise can not simply be attributed to risk aversion. Insurance company has a comparative advantage on the risk-taking. Reduce the probability of loss and related costs. Protect debts’ interests. Tax incentives. Play a regulatory role. From this point, this article analyzes that insurance can reduce the principal-agent cost of corporate shareholders and managers, as well as shareholders and debtors, reduce the risk of moral hazard and adverse selection problems and to reduce the transaction costs in theory. Furthermore, by reducing bankruptcy probability and the tax burden, which play a role of promoting the corporate value, companies pay insurance premiums and transfer some of the risk to the insurance company. When a loss occurs, enterprise can get some of the compensation, which can ensure its continued and stable operation.Foreign scholars have proved that insurance has a positive influence on enterprise value, but our current research in this area is limited to the theoretical level. Whether this conclusion is fit for the domestic has not been confirmed. Therefore, this article selects the ROE indicator as a measure of enterprise value. According to the MM theory, we select premiums, corporate assets, long-term debt ratio, cash ratio and HH index as independent variables, and earnings virtual as a control variable. Through empirical testing, it tries to make out the relationship between insurance and corporate value.Firstly, this article establishes a comparison model, including10insurance companies and10insurance companies between which firm size and industry are very close. Through the analysis of selected indicators, it founds that the average value of the insured companies is greater than the average value of the uninsured. To make the argument more convincing, it selects102listed companies’financial data and insurance data from2008to2012, it establishes a multiple linear regression model. Then through Eviews software, it selects the weighted least squares method and do regression analysis of the cross-sectional relationship between insurance and corporate value. The sample also shows there is a positive correlation between enterprise value and insurance.From China’s true situation between insurance and enterprise value, two aspects of the empirical research fully illustrates that our country’s insurance plays a positive role in enterprise value and this conclusion is consistent with foreign scholars’... |
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