The Research On The Financial Situation In The Credit Rating Of The Life Insurance Company

China’s insurance industry has developed rapidly since it was recovered in1980s. The insurance penetration and insurance density has increased. But it also brings us some problems. Over the years, insurance companies have expanded blindly. In order to seize the market share, the behavior of exaggerate the product’s revenue and expand insurance coverage range appeared frequently. There are many claims disputes result from the bad claim service. These damaged the social image of the insurance industry greatly, and also reduced the social acceptance of insurance. Many people even equate the insurance company with a liar. Integrity is the corner stone of the development of the insurance industry. In the condition of the entire insurance industry lack of credit, the author believes that the timely establishment of the credit rating system of the insurance companies is a good choice for a better social image of the insurance industry. It is also good for the regulation of the insurance industry’s competition and sustained and healthy development of the entire insurance industry.This paper first introduces the concept of credit rating and the credit rating of the life insurance companies. Then it compares credit rating methods of international credit rating institutes and domestic credit rating institutes. According to the results of the compare analysis, it is obvious that the domestic quantitative analysis method fall far behind the international method. In order to improve this situation, in the main part of this paper, entropy method is introduced to the quantitative study of the life insurance company’s credit rating. The author select a series of financial indicators, do a quantitative analysis of the financial condition of2011of the15sample companies, use the quantitative analysis model which build based on the entropy method.There are two possible innovations of this paper. The first one is the innovation in research methods. The majority of researches on credit rating of life insurance companies in academia are focus on the establishment of the credit rating system and the selection of indicators, But this paper selects sample companies and does the quantitative research.The second one is the innovation of the quantitative analysis model.Due to the restrictions of the structure of the author’s knowledge, research capacity and data availability and other relevant factors, there are also some shortcomings of this paper. The first one is the effects of the quantitative analysis model based on entropy method cannot be verify right now. It needs the test of time. Second, if this paper can compare and analysis the results with the other quantitative model’s results, it may get some exploratory conclusions.