Longevity Risk Analysis And Solution In Chinese Commercial Insurance Companies Based On Dynamic Model Of Mortality

With the development of the economy and improvement of medicine, our country has come up to the stage of rapid growth of the population’s life expectancy. There is a great longevity risk in commercial insurance companies, because of the changing of life expectancy and mortality in our country. Longevity risk affects people, commercial insurance companies and the government pension agencies in different ways. This article will focus on the longevity risk in commercial insurance companies. Firstly we defined the longevity risk and its characteristics firstly. Secondly, we predicted future mortality by dynamic mortality model. Then we analyzed the longevity risk in commercial insurance companies. Finally, we analyzed the management of longevity risk in commercial insurance companies, and discussed the present problems of longevity risk management in our country.This thesis is divided into six chapters.The first chapter is Introduction. This chapter firstly expounded the purpose of the study and the significance of the research. And then we introduced the related research in the field of longevity risk and had a brief literature review. At the end of this chapter, we mentioned what we want to discuss in this article.The second chapter is overview of longevity risk, firstly introduced the definition of longevity risk of people, commercial insurance companies and the government pension institutions separately. Then we analyzed three characteristics of the longevity risk. Because of that, there are a lot of obstacles in longevity risk management. Finally we analyzed the current situation of longevity risk in our country with the population data of recent years.The third chapter predicted the longevity risk in our country by predicting future mortality rates. Firstly, we introduced the static model and dynamic mortality model respectively. Based on the characteristics of each model, we selected Lee-Carter model as the prediction model. Secondly, we used Lee-Carter model to predict the changing of the mortality rate in the future with the population statistical data in our country. Then this chapter smoothed the results with Gompertz model. In the final results, we could see that there is serious longevity risk in our country.The fourth chapter discussed the influence of longevity risk in commercial endowment insurance products. This chapter calculated the longevity risk in commercial endowment insurance product pricing and the impact of reserve. In the next10or20years, the longevity risk will lead to Insufficient in reserves. If we don’t take any action, longevity risk will seriously impact the safety of insurance companies.The fifth chapter introduced the longevity risk management through the case analyzing. There are many ways to manage the longevity risk. Foreign experiences are helpful for us to manage the longevity risk in our country.The last chapter discussed problems and suggestions of our country’s longevity risk management. This chapter firstly analyzed the problems of longevity risk management in our country. Then we put forward feasible suggestions. We hope we can find the longevity risk management which is suitable to our situation.This article included the overview of longevity risk, prediction, impact and management. Theory research and case analysis were used in this article. Moreover, qualitative analysis and quantitative analysis were also included. In addition, the latest population statistics data was used to ensure that the results fit the actual situation well.