The Cybernetics Approaches To The Asset-Liability Management Of The Insurance Companies

Since 1990s, great changes have taken place in international insurance industry with the changes of international economic and financial environment. First, the economical globalization is increasingly obvious, following the surging of information and electronic technology, the development of region economic integration and the rapid movement of capital across the countries. Second, the business of financial institutions, which are highly integrated with the rapid development of financial liberalization, incorporate each other and its internationalization degree has also been enhanced greatly. Thus, it is necessary for insurance market, money market and capital market to joint together. However, the development of insurance industry is confronted with some new challenges, such as more complicated environment, more risks (credit, interest rate, exchange rate, stock price change and inflation are inexpectantly affecting the asset/ liabilities value of insurance company), more complicated insurance products and the services, increasingly internationalization of insurance company management and the widespread application of the information technology in the insurance business.The restored domestic insurance industry has rapidly developed since 1980. Compared with the developed country, there is a huge gap between them. Because of historically unperformed assets and lack of the asset-liability management(ALM) theory, our life insurance industry suffered a large interest spread loss. The method of asset/liability management is the core of modern insurance management and the epitome of modern finance theory and management technology. The asset-liability management refers to the behaviors which the insurance company harmonizes its assets with its liabilities because its cash flow suffered from the changes of the marketing interest rate and was a kind of joint asset-liability management in terms of interest rate risks formerly. Broadly, the asset-liability management is a complicatedly systematic engineering which implements the dynamic optimized management on the aspects of total quantity and structure so as to realize profit maximization through choosing and controlling the types, quantity, terms and risks of the assets and liabilities among the insurance company's in-balance and off-balance. It is highly integrated with financial risk management, financial control and strategy management highly. Currently, our managers mostly focus on more asset-liability management to interest...