Empirical Study On The Effect Of The Corporate Governance Upon Insurance Company's Insurance Investment

With the outbreak of the financial crisis,people began to realize the importance of financial institution governance,and financial institutions began to change their role from “governors” to “governed”.As one of the top three financial institutions,the insurance industry has achieved vigorous development in recent years both in terms of total assets and premium income.At the same time,however,the insurance industry in China also faces many problems.According to the current situation of China's insurance industry development,China's insurance companies have two major sources of profit: underwriting business and investment business.In fact,China's underwriting business is generally in a state of loss.Therefore,investment business becomes the only way for insurance companies to obtain profits.According to the official release of China's Insurance Regulatory Commission,the average capital efficiency of insurance companies in China is relatively low.This has affected the insurance company's solvency to a large extent,so it needs urgent attention.From the perspective of corporate governance,this paper studies the effect of the corporate governance upon insurance company's insurance investment.By summarizing the literature on governance and efficiency of insurance companies at home and abroad,we find that China's research on insurance companies lags behind.Few scholars study the factors affecting the efficiency of insurance companies from the perspective of corporate governance,and most of them focus on theoretical studies.There are few empirical studies and empirical methods are relatively simple.This paper uses 147 insurance companies including property insurance and life insurance as samples in 2016 to calculate the capital efficiency of insurance companies in 2016.According to the importance of corporate governance factors and the availability of data,the paper is divided into four levels: shareholder,board of directors,board of supervisors and managerial level and selects seven typical corporate governance factors: shareholding ratio of the largest shareholder,shareholders meeting times,separation of powers,board size,percentage of independent directors,board of supervisors scale and executive scale to study the effect of the corporate governance upon insurance company's insurance investment.Through theoretical analysis and empirical research,this paper finds that in China,the shareholding ratio of the largest shareholder and the percentage of independent directors can effectively improve the capital utilization efficiency of insurance companies,and shareholders meeting times,separation of powers,board size,board of supervisors scale and executive scale have no significant effect on the capital utilization efficiency of the insurance companies.In general,the governance mechanisms of insurance companies in China has played part of the role in improving the capital utilization efficiency of insurance companies.However,there are still some corporate governance mechanisms don't play a role.Therefore,the insurance company should further improve its own corporate governance to ensure that the corporate governance mechanism can fully play its due role,and make the insurance industry develop steadily.