The Impact Of The Business Growth And Separation Ratio On Chinese Life Insurance Companies' Solvency

With the gradual recovery of Chinese insurance business in 1980,the insurance industry has also begun to develop rapidly.By the end of 2017,there were 170 domestic insurance companies and 85 life insurance companies,of which there were 57 Chinese life insurance companies.In 2017,the insurance premium income of the national insurance industry was 3658101 million yuan,an increase of 18.16%compared with that of last year.The life insurance company's original premium income is 2603955 million yuan,which accounts for 71.18%of the original premium income of the insurance market.The life insurance industry not only plays a decisive role in Chinese insurance industry,but also the reinsurance business has become an important way for our life insurance companies to achieve financial integration and risk diversification in the development.Since the reform and opening up,with the gradual acceleration of Chinese insurance industry,by the end of 2017,as the second largest insurance body in the world,the total assets of Chinese insurance companies have reached 16748937million yuan.Therefore,the consequent industry risk is also starting to enter the field of vision.In order to prevent the occurrence of major risks,as the core of regulation,solvency supervision is also more and more concerned by regulatory authorities.In order to integrate smoothly with the international insurance regulatory rules,the Chinese Insurance Regulatory Commission officially issued a risk oriented Chinese second generation solvency supervision system in 2015.Compared with the first generation solvency supervision system,the main goal of the second generation solvency supervision system is to control the business risk of insurance companies.Therefore,under the second generation system,the ability of insurance company's risk identification is stronger.It also requires insurance companies to have higher solvency.The growth rate of premium income and the proportion of reinsurance which reflect insurance company's business scale and reinsurance status can also affect the solvency of the insurance company through its original premium business scale and retention limit.Therefore,it is of great practical significance to study the effect of life insurance company's business growth and the proportion of reinsurance on its solvency.Based on the analysis of related theory of life insurance business growth and separation ratio,this paper selects share of the top 26 life insurance companies in the insurance market of China,using the data in 2011-2016 years of business growth,reinsurance ratio and solvency adequacy ratio,then doing empirical research,the conclusions are as follows:(1)The business growth rate of Chinese life insurance companies is faster,but the business profit level still needs to be improved.(2)The overall solvency of Chinese life insurance industry is in good condition,and most of the companies have met the requirements of the regulatory authorities.(3)The life insurance company's net premium growth rate increase can significantly improve the solvency,and each unit increase for the solvency ratio contribution to the increase of 8.77%.(4)The life insurance company's reinsurance business also has a significant impact on the solvency.That is,with the increase of the reinsurance ratio,the solvency level of the company will also be improved.Finally,based on the above conclusions,the paper puts forward several rationalization proposals for the life insurance company to improve business growth capacity,plan reinsurance business and improve the company's solvency by other means.