China’s Life Insurance Company’s Financial Risk Research

China’s insurance industry has developed rapidly in recent years in the financial industry occupies an important position, therefore, operating conditions and a stable financial situation in the insurance industry is not only related to the interests of the company, will also affect the stability of the entire financial sector, economic development and social stability. As the life insurance industry natural high debt, making its high financial leverage. The capital structure is to study the distribution of long-term debt and equity capital, determines the enterprise’s solvency and financing capacity. The author of the research summary that various scholars, capital structure and financial risk is a positive correlation, therefore, how to optimize the capital structure is equivalent to reducing the financial risk.With the life insurance industry great potential for development and sustained expansion of the life insurance industry, the life insurance company solvency presented a greater challenge. Under the new financial environment, the relationship between research and the life insurance company’s capital structure between the House financial control is the key to success in the insurance industry under the new situation. Therefore, optimizing the capital structure of life insurance companies in order to achieve financial risk control, and promote the healthy development of the life insurance industry, are particularly important.Therefore, this article from the start of the life insurance company’s capital structure financial risk analysis of life insurance companies, based on the entire insurance industry, through the capital structure and financial risk analysis, combined with the actual situation of China’s life insurance industry in an attempt to control by optimizing our capital structure the purpose of life insurance financial risks. This paper is divided into five parts:The first chapter, the main part of the background and significance of the study are described, explained study methods and ideas. Important to the capital structure and financial risk related theories are introduced, and on this basis, this paper studies the structure and innovation and inadequate.The second chapter analyzes the life insurance company’s capital structure. This chapter is based on the theory of capital structure, including the MM theory, agency theory weigh orderly financing theory, asymmetric information theory and the theory of the latest CHH basic concepts. Capital structure to form a unified theoretical framework. On this basis, the debt equity structure and structural characteristics of China’s life insurance company explained separately. And Ping An Life, for example, analysis of changes in the capital structure of Ping An Life and factors affecting the data list for later pave the way for empirical analysis.The third chapter of the life insurance company’s financial risk analysis. Continuation of the idea that part of the analysis above, the first theoretical analysis of financial risks, including financial risk control methods and forms combined with the actual situation of China’s life insurance industry life insurance company’s financial risk profile to elaborate.In the introduction to the theory of financial early warning system, the selection of Z-score model to China’s three listed insurance companies analyze financial risks. This results, the proposed combination of risk control characteristics of China Life Insurance Company’s financial risks.The fourth chapter, empirical analysis. The author of the study panel data model, select23Chinese-funded life insurance companies seven years of data, through the establishment of the panel data model using regression analysis of the financial impact factor analysis of capital structure. Since this constitutes a selected time series data, you must first be stable for the independent variable unit root test, and then on the basis of the model to select fixed effects and random effects, regression through EVIEWS5.0, demonstrated by the text before the regression results theory assumes control measures and provide the basis for later.The fifth chapter, optimizing capital structure, control financial risks. Through the above analysis and conclusions, as well as a brief description of the capital structure optimization method, combined with case studies in related fields, in the new financial environment, how to optimize the capital structure of China’s life insurance companies and on this basis to reduce the financial risk to make some practical measures.This writing, there are also inadequate, first of all, the theoretical study of this paper is still built on the MM theory and modern capital structure theory, the less new capital structure theory, the lack of deep theoretical knowledge. Under the control of financial risk life insurance companies to optimize the capital structure is relatively small, this analysis is relatively simple, the lack of in-depth theoretical support and corrective recommendations corporate strategy level.Secondly, the selected empirical data, the small sample size involved. Factors to consider in the selection of independent variables is not comprehensive enough, the selected indicators of the presence of some errors. Therefore, future studies should be conducted on the relevant indicators more comprehensive analysis of the data should be selected through various screening.Finally, due to the mature period of late life insurance companies, the relevant theoretical research conclusions on China’s life insurance companies do not apply. Moreover, China’s life insurance company listed shorter, smaller scale compared to other financial sectors.In future research related aspects, it should be more accurate indicators screening, a more comprehensive analysis of the factors relationship between capital structure and financial risk.