The Influence Of C-ROSS On The Risk Management Ability And Investment Ability Of The Life Insurance Company

Since the reform and openning-up in1979,our country’s insurance industry has also revived.After China joined the WTO in 2001,the insurance industry stepped into a stage of mushroom.At the same time,the principal part,which supervises and administrates our country’s insurance industry,the solvency supervision system,has transitioned from the first generation to the second one.The subject of this passage is to analyse thematically and empirally the influence of C-ROSS on the risk management ability and investment ability of the life insurance company.The research goal of this paper is to analyse how the C-ROSS exercises an influence on insurance industry.The whole operation and management activities would be divided into two parts:the investment part and the risk management part.During the process of research,the change in the operation and management ability and the investment ability would be used to reaveal the C-ROSS’s influence on insurance industry.The shadow price is chosen to be the tool to measure the change of the two activities between the two solvency systems.Regression analysis will be processed on the panel data to get the coefficient to calculate the shadow price.Above is the principal research idea in this paper.After the empirical research,could draw the conclusion that the second generation solvency supervision system will improve the risk management ability and investment ability of the life insurance company.In the meanwhile,the risk management ability will be dramatically improved owing that the second generation solvency supervision system is risk-orinted.Besides it also has much more improvmemt on the two activities of small-sized life insurance company than the middle-sized one and the large-sized one.It’s noting that the C-ROSS also has a negative effect on the investment ability since it focused too much on the short term risk indicators.According to the research results of this paper,The life insurance company can choose the more effective procedure activity to improve its cost efficiency during its operation and management process.The supervision institution of the insurance industry should continue to execute the C-ROSS to the letter to improve the risk mangement abilities of the life insurance company.At the same time,the supervision institution should also appear a measure to hedge the negative effect that the C-ROSS posed on the investment ability of the large-sized company.