Research On Risk Management Mode Of RQ Capital "Futures+Insurance"

Today's world economy is full of opportunities and challenges.The increasingly globalized Chinese companies are facing various risk challenges from the outside world,especially the risk of commodity and asset price fluctuations in the international market.On the one hand,the proportion of large and medium-sized enterprises in China's above-scale industries using financial derivatives to transfer market price risks is much lower than that of developed countries such as the United States,and there is still a considerable gap in the ability of financial services to the real economy.On the other hand,central enterprises such as CITIC Pacific and Sinopec subsidiaries do not have a deep understanding of financial derivatives.Besides,their operations are not standardized,and their management is not in place as well.The above-mentioned factors result in huge losses in trading financial derivatives such as crude oil futures and options.The introduction of the "futures plus insurance" risk management model outsourcing the enterprise's market price risk management services to financial institutions not only allows enterprises to participate in the derivatives market indirectly,but also enhances the company's ability to resist risks.Based on enterprise risk management theory,futures and options hedging theory and option copy hedging theory,this paper studies RQ capital's risk management model of "futures plus insurance".In the first part,this paper showcases the investigation about the current situation of domestic enterprise management market price risk.In this way,it pinpoints the problems that since the enterprise faces the market risk of commodity price fluctuation in the process of development,while most enterprises being unable to use financial instruments to manage market risk,which results in the enterprise to face operational risk.In the second part,the problems are to be analyzed.By consulting relevant literature,the author points out the necessity of enterprise price risk management.Meanwhile,the feasibility and the likelihood of popularization of the groundbreaking "futures plus insurance" risk management model are discussed.In the third part,solutions to problems discussed are proposed.Firstly,the situations about the pilot of "futures plus insurance" risk management model in China is introduced,including the pilot of the three major commodity futures exchanges in China.Secondly,the operation mechanism and practical significance of the "futures plus insurance" risk management model are summarized in both literal and graphical manner.After analyzing and studying the RQ capital "futures plus insurance" risk management model,the paper points out the shortcomings of the model,including the risk not being fully hedged,insurance costs being too high and the model's ecological chain needing be further expanded.Also,RQ Capital's improvements to the model are mentioned,including the introduction of PICC P&C insurance,innovative use of exotic options,and research on risk hedging models.In the last part of the paper,the direction of future development is proposed.From the various perspectives of the participants of the "futures plus insurance" risk management model,this part aims to analyze the future improvement of the model,including innovative product design,introduction of multi-party,building the ecosystem of "futures plus insurance" model,trying to purchase service bidding model as well as combining the on-market options market.In summary,the last part serves to provide a reference plan for the use of "futures plus insurance" risk management model for the future RQ Capital and other risk management service agencies.