A Study On Forecasting The Solvency Of China's Property Insurance Companies Under The China Risk Oriented Solvency System

The supervision of solvency is the core content of China's insurance industry supervision.China Insurance Regulatory Commission(CIRC)began to study the second-generation solvency monitoring system on April 18th,2012.Through three years of theoretical and practical exploration,CIRC officially published the specific rules of China Risk Oriented Solvency System(abbreviated as C-ROSS)in February,2015 and implemented formally and nationally in 2016,which marked the transition from scale-oriented insurance supervision to risk-oriented insurance supervision in China and the fact that the risk management of the insurance industry has since entered a new era.C-ROSS implement the comprehensive risk management concept and creatively explores a comprehensive division of risks,an effective measurement method,and a sophisticated and sophisticated risk measurement model to identify risk correlations,so as to more accurately reflect insurance companies'solvency risk.Based on the perspective of the C-ROSS,this paper is an extensive and profound discussion about the solvency of China's property insurance companies.Firstly,it summarizes the research on the basic theory of solvency and forecasting the solvency of China's property insurance companies at home and abroad.Because of the difficulty of obtaining the solvency adequacy ratio data during the trial operation phase of the C-ROSS,fully considering the"risk-oriented”principle under the C-ROSS,this paper make a reasonable and appropriate simplification to measure the solvency adequacy ratio under the C-ROSS,comparing it with the solvency adequacy ratio under the "first generation"system.Further,based on the historical data of China's property insurance company from 2010 to 2015,several variables such as company characteristic variables,internal financial indicators,risk variables,and external environment were selected as predictors.Firstly,this article modify the original imbalance data through oversampling method,and then predict the solvency of China's property insurance company for two years in advance using the random forest model,and analyze the key indicators of solvency of property insurance companies and the solvency process.The study shows that overall,based on the C-ROSS,the solvency of China's property insurance companies is significantly lower than that of the "first generation "system.In addition,the random forest model combined with the oversampling method is effective in forecasting the solvency of China's property insurance companies.The effect of key indicators reflects that the solvency monitoring system of China's property insurance companies is not yet mature.The use of insurance funds should be paid attention to and improving the solvency of insurance companies by adjusting "reinsurance separation and business concentration" should be a prudent measure in the management of solvency of China's property insurance companies.