Property Insurance Company’s Profitability And Its Impact Factor Analysis

With the development of the national economy, China’s insurance industry has achieved rapid development in recent years. By the end of 2014, the National Insurance density of 1,479 yuan/person, and insurance penetration was 3.18%. Insurance industry’s contribution to GDP becomes more and more important. Although the development of property insurance companies is also very fast in recent years, but declining underwriting profit since 2008 caused widespread concern. The particular questions especially profitability issue in property insurance company has become an important research topic in recent years. Finding the appropriate insurance company profitability analysis framework to study its profitability factors and finding methods to promote the profit ability have important practical significance.Through analysis the particularity of property insurance company’s profit model and combined with classic financial analysis system-DuPont analysis system. I deal with relevant indicators and work out a suitable insurance company profitability analysis system. Finally, this paper uses China Insurance Yearbook data to test the extent of impact of each index so as to provide policy recommendations for managers.Firstly, the first part describes the background and significance of the topic of research, and analyses the current research in related fields. It helps to understand the current research process in this field and find the innovation of this paper. The next chapter describes the basic concepts of profitability, common evaluation and the main influencing factors. Then the third chapter researches the operating characteristics and source of profit for property insurance companies to find out the particularity of property insurance company’s profitability analysis. The following fourth chapter describes the framework of DuPont analysis system which plays an important role in the financial analysis. By replacing relevant indicators in this system with purpose, this paper structures a profitability analysis system with net interest rate of the rights and interests as the core and analysis every indicator with the data of China’s property insurance companies. The fifth chapter is the empirical test of new DuPont analysis system. I select twenty-three company’s data in five years in the China Insurance Yearbook. After the sample data stationary test and regression model selection, I test the data and results shows the different influencing levels of different indicators. Finally, some targeted policy recommendations are proposed respectively from the corporate level and supervisory level according to the findings of the foregoing. The seventh part is the end, content and results are summarized.Innovation of this paper is mainly reflected in the new DuPont analysis system for property insurance companies, which provides a new approach to evaluate the profitability of property insurance companies. The importance of this paper is not only meaningful in the theoretical significance, but also reference in the practice. The use of property insurance company profitability analysis system can be regular evaluation and review of the insurance company’s business, providing important information for the company’s managers and regulators. However, due to the limited level of authors, there are still many deficiencies. The analysis process is relatively simple and only focused on financial factors, which will be the focus to be improved in future research.