Research On The Impact Of Operating Performance From C Apital Structure Of China's Property Insurance Company

The capital structure of enterprises is one of the most important basis for the enterprises to make financial decisions.The capital structure decision of the enterprise should maximize the value of the enterprises in advance,which is the ultimate goal of the financial management of enterprises.Since 1955,MM theorem was proposed by Modigliani and Miller,the concept of capital structure is defined as the proportion of debt capital and equity capital by most scholars.The problem of capital structure's impact on business performance is always the focus of academic researches.Scholars at home and abroad have made abundant achievements in traditional industries,emerging industries and commercial banks and other industries.But there are few researches related to the insurance industry.After the recovery of the insurance business in our country,China's insurance industry began to develop rapidly.Since then,China's insurance depth and insurance density increased quickly,many insurance companies have been set up,which has broken the monopoly of the insurance industry.The insurance industry has changed from a weak industry into a significant industry related to people's livelihood.After the 2008 financial crisis,in the face of perplexing domestic and international economic environment,China's insurance industry has always maintained a relatively stable development.For the first time,the status of insurance industry has been elevated to the national governance level.In China,the market share of the property insurance industry continues to increase,the premium income continues to grow,and the insurance property insurance is becoming more and more abundant.As the same time,the property insurance companies are facing fierce market competition.In the process of competition,we found out that the capital structure of property insurance companies is not stable,the gap between different corporates' performance is becoming increasingly obvious.So if it is able to achieve improving the property insurance companies'business performance through optimizing the capital structure,has become the urgent problem to be solved in the insurance market.Firstly,this paper summarized the relevant research results and deficiencies by combing the domestic and foreign literature on capital structure and operating performance.Then,the paper defined the theory and concept of capital structure and operating performance,and expounds the characteristics of the capital structure of China's property insurance companies and the performance evaluation indicators.Based on the description of the current situation of the capital structure and operating performance of China's property insurance companies,this paper selected the financial data of 7 Insurance Companies in China from the year of 2010 to 2015,and made empirical analysis using the panel data model.The analysis found out that the capital structure of China's property insurance companies will have an impact on their operating performance.The result shows that the equity ratio of property insurance companies has a negative impact on the net premium ratio,the asset liability ratio has a negative impact on the cash ratio,kenny rate has a positive impact on our property insurance companies'retained premium rate,has a negative impact on the comprehensive cost rate.In summary,Optimizing and adjusting the capital structure of China's property insurance companies can improve the companies' operating performance,which can Promote the companies'sustainable development.