Study On Reinforcement Of Financial Information Disclosure Of Chinese Insurance Companies

The financial information disclosure plays an important role in lowering the insurance companies’ executive risks, improving the governmental supervising efficiency as well as the efficiency of resource allocation in market. However, due to the late start of Chinese insurance companies, the incomplete capital marketing mechanism and unsound supporting facility, there are substantial shortcomings in the fields of financial information disclosure and relevant supervisions. These shortcomings not only hinder the development of Chinese insurance companies, but also damage shareholders’ interests. Through the study on the financial information disclosure of insurance companies, this article has grasped a comprehensive understanding of this industry’s features and status, pointed out the problems in it and analyzed the causes by combining the theory and reality. Then, according to analysis, this article puts forward the corresponding countermeasures. It looks forward to taking this as a warning for the reforms of this industry in the future in order to improve the quality of the financial information disclosure of insurance companies as well as guarantee the legal rights of shareholders. Thus, the development of the insurance industry can be promoted and the operating efficiency of the insurance market will be enhanced.This article consists of sixth parts.The first part is introduction, which introduces the financial information disclosure of insurance companies. The contents of the financial information disclosure of Chinese insurance companies and that of the countries with relatively mature insurance industry are introduced. Subsequently, they were compared in order to discover the shortcomings of Chinese insurance companies at present in the field of financial information disclosure. It is found by comparisons that the contents of financial information disclosure of Chinese insurance companies is in a lack of financial information such as the future cash flow, uncertainties concerning time and risks as well as sensitivity analysis. Meanwhile the calculation method of many key indexes is not disclosed. At the same time, Chinese insurance companies have totally neglected the disclosure of non-financial information, which leads to the absence of the supplementary roles provided by the non-financial information.The second part introduces the theoretical meaning and realistic reasons of the financial information disclosure of Chinese insurance companies. Theoretically, just because there is information asymmetry of the insurance market, the financial information disclosure is reasonable in alleviating such asymmetry. The features of the insurance industry necessarily require the predictability of financial information, the particularity of financial indexes, the stringency of the supervision and the versatility of the demands for financial information in insurance companies. Therefore, due to the realistic reasons, the financial information disclosure of Chinese insurance companies is necessary to be reinforced.The third part introduces the main current problems in the financial information disclosure of Chinese insurance companies. The main problems include the low authenticity of the disclosed financial information, incomplete financial information disclosure which needs to be improved, not timely and non-standard disclosure behavior and lack of financial forecast information as well as a blind compliance with relevant laws without concerning the economic benefits.The forth part describes the reasons that cause the problems of financial information disclosure of Chinese insurance companies, i.e. the constraint factors of financial information disclosure of Chinese insurance companies, including the imperfect laws and regulations, ineffective financial supervision, the less attached importance of financial information disclosure by insurance companies themselves and the insufficiency of the professionals in the field of insurance and finance.The fifth part introduces the system of financial information disclosure of insurance companies in countries with relatively mature insurance industry, such as US, UK, Germany and Japan. It is found that the countries with relatively mature insurance industry have high standards on financial information disclosure, relatively complete supervision systems, as well as systems of financial information disclosure built based on the "solvency".The sixth part puts forward the corresponding suggestions on the system of financial information disclosure of Chinese insurance companies. The suggestions mainly include how to improve the disclosed contents of the financial information, enhance the supervision and construction of supporting laws as well as the training of the professionals in insurance&finance specialty, and the non-financial information disclosure.