The Study On The Life Insurance Solvency In China Based On Improved TOPSIS Method

It has been nearly one hundred years since the life insurance appeared anddeveloped in China. Now people has been in close relations with the product ofinsurance in the daily life. Under the influence of the global financial crisis and debtcrisis in recent years, many financial companies have reached a crisis point.Fortunately, the insurance companies in our country avoid this crisis because of theslight participation. As we know, the insurance industry is the earliest ones totallyopened to the outside world. It’s a very interesting topic to understand the differencebetween domestic life insurance and foreign life insurance in solvency. In this article, Iwill borrow the ideas of life insurance solvency models from other scholars andsupervision standards of other nations to analyze the insurance market in China withthe TOPSIS method. With the help of EXCEL and SPSS software, this article choose20life insurance companies as samples for study. There are two innovations in thisarticle. Scholars always focus few angles of life insurance company solvency. Peopledoesn’t pay much attention to the analysis of the differences between domestic andforeign life insurance solvency. So this article will handle this issue and this is the firstinnovation. The second innovation is the constructed solvency model. When build thesolvency model, we need to give a certain weight. Previous studies determined that theweight of solvency tend to have a degree of subjective factors, and therefore can’tproperly index the information contained in the feedback, which can’t effectively carryout the real objective and accurate evaluation. Based on relevant statistical indicators,collecting complete information about a number of indicators, the use of entropyweight method to determine the weight, combined with the weightedTOPSIS(Technique for Order Preference by Similarity to Ideal Solution) method forlife insurance companies in recent years, the most recent data published in entropymethod drawn from the analysis of the factors affecting the solvency weighting thenTOPSIS method based on sort, this method in the study is the first time used ininsurance company solvency analysis.This study found that foreign life insurance solvency is much better than theChinese-funded insurance companies. This phenomenon has a strong practicalsignificance, taking into account the intrinsic link between the various indicators can be found from the results the gap between the two types of life insurance companies.The results can provide some reference to improve the solvency of life insurancecompanies in China.