| This paper is a study of the American and British life insurers as institutionalinvestors, focusing on their fundamental principles and techniques of investment. The seven chapters of this study cover the following themes: the features of lifeinsurance fund as an institutional investor, the balance of solvency objective andrate-of-return goal, the approaches used for analyzing an investment tool, thestrategies and tactics for constructing a liability-matching portfolio, regulations andrestrictions on life insurers' investment, the actual asset allocation of life insurers inUSA and UK and reasons for differences between the two patterns, and a comparisonof investing principles among life funds, mutual funds and hedge funds. As a conclusion, this paper points out eight suggestions for the Chinese lifeinsurance industry: to summarize the asset patterns according to different life productsinstead of life insurance as a whole, to take liability-matching as the paramountobjective, to direct life fund based on possible reforms of the capital markets, toderegulate investment restrictions gradually, to have a further research on the Britishpattern, to develop a Chinese-version investment model for actuarial use, tostreamline rules for life funds and mutual funds, to follow the tentative model whenstudying other countries. There are several innovations in this paper. Firstly, it is a comprehensive study oflife fund as an institutional investor, finding a thread for investigation includingsources of and internal restrictions on the fund, analytical approach for an investment,supervisory rules, and historical allocation of the fund. Secondly, this paper tries toincorporate qualitative and quantitative methods with legal analysis. Thirdly, thedifferences between US and UK are found and explained, summarizing a way forcharacterizing other countries: the structure of insurance premium, the feature ofcapital market, regulations and traditions. |
