On China's Insurance Solvency Positive Problems

Insurance solvency is the ability to reimburse the applicants who have suffered economic loss. There are various risks in the insurance industry. But all these risks will end in shot of solvency. To let the insurance companies have necessary solvency in their continuous operation is the government's key target of regulating the insurance industry.On the basis of elaboration on the basic concepts of solvency, factors that influence solvency and solvency management, according to the ratio system promulgated by China Insurance Regulatory Commission, this dissertation selects 9 financial ratios with the data of China's main insurance companies and adopts factor analysis and the statistic software of SPSS to illustrate the solvency of China's main insurance companies. Factor analysis shows that the main factors influencing solvency are insurance scale and profitability, assets structure and composite cost rate. This analysis involve implications on how to improve the solvency: to reinforce the capital, increase profitability , reduce expenses. And at the same time , reinforce the solvency management from the following three aspects of insurance companies themselves, association of insurance industry, and insurance regulatory organization. And all these measures are to ensure China's insurance industry develop continuously and steadily after entering WTO.