Research On Financial Risk Early Warning Of China's Property Insurance Company

The insurance industry of China has been developing quickly since 1980 and it has become the third largest insurance market in the world.the country's premium income reached 3658.1 billion yuan in 2017,an increase of 18%year-on-year.By longitudinal analyzing of the industry development over the past four decades and horizontal comparing of the development of other countries in the world,although China's insurance has experienced rapid development,the current level of development is still relatively low because of the low starting point,and the industry risk is high.After the global financial crisis in 2008,financial supervisory authorities have paid more and more attention to issues such as increasing awareness of risk warning and improving risk management capabilities.To strengthen and improve China's insurance supervision and management system and promote the healthy and steady development of the industry as a whole.It is of great practical significance to carry out risk warning research on insurance companies.This article chooses the financial risk as a starting point to carry out the research of early-warning of property insurance companies.The article is guided by basic theories of economics,finance,and risk management,focusing on the research ideas of determining the objects of early-warning and content of warnings,designing early warning indicator system,and constructing early warning models.Establishing a risk early warning model for the financial risks of China's property insurance companies to solve the problem of how to effectively managing the financial risks of China's property insurance companies.The main content of this article can be divided into three parts.The first part of this article addresses the issue of the determination of early-warning objects and content.Referring to the logical framework of most domestic researchers,and the regulatory practice of China's insurance regulatory Commission,this paper will take the sufficiency of solvency as the criterion in defining problem companies and normal companies.And then we analyze different forms and characteristics of financial risk that are mainly faced by China P&C insurance companies at present,and provides the foundation for the designing subsequent index system.The second part is about the design of the early-warning indicator system.By drawing lessons from previous experience and considering the selection principles of predictability,pertinence,measurability and operability of the indicators,we selected a number of more reasonable financial indicators based on the sources and characteristics of the financial risks of insurance companies.The third part is the construction of early-warning model.Considering the information coupling and multicollinearity of the financial risk indicators,this paper selects the Principal Component Analysis(PCA)and the Fuzzy Comprehensive Evaluation Method(FCEM)to construct the early-warning model.We use the company data from China Insurance Yearbook of year 2012?2015 for empirical analysis,and the results suggest that FCEM is more effective in early-warning and is more applicable to the financial risk early-warning of property insurance companies in China.Finally,we summarize the research results of this paper,and some personal recommendations are given to making a little contribution to the healthy development of China's insurance industry.