The Study On Entire Risk Early-Warning Of China Property Insurance Companies

After the baptism of the financial crisis, China property insurance companies face more complicate risks. The covered potential risks have been revealed gradually. The steady development of our property insurance companies requires managing risks, building effective early—warning model and taking measures to avoiding risks in time. However, the risk management of domestic property insurance companies is not optimistic. There are some problems:Firstly, the development of risk management theory started late in China and the studies about risk situation are mostly based on qualitative analysis; The early—warning indicator system is not perfect, which can not reflect the changed risks; The risk early—warning models are not good enough.Secondly, domestic property companies have poor awareness of risk, even have no ideas about risks.Thirdly, the regulation system of domestic property insurance companies is not perfect. Once there is something wrong with companies, the CIRC will come forward to take over the insurance companies directly which prevents companies seeking measures to avoiding risks conductively. In addition, the resources for regulating domestic property insurance are scare. If these resources can not be used effectively, there are not satisfying supervision results.Based on these problems, the following work has been done:Firstly, analyze the types, characteristics and causes of our property insurance company risks and introduce the current risk situation of domestic property insurance companies. Based on entire risk management theory, construct an early-warning indicator system which is in line with the status of domestic property companies.Secondly, use Grey Correlation—Rough Set Model to analyze the early-warning indicator systems before and after the financial crisis and get key risk points. Before the financial crisis, the key risk points are the rate of returns on capital employed, premiums receivable, admissible assets rate and reinsurance rate. It also means that before the financial crisis, property insurance companies should focus their attention on profitability, asset liquidity, solvency and reinsurance. After the financial crisis, the key risk points are the growth rate of self-retention of premiums, combined costs ratio for two years, premium rates receivable and outstanding losses reserve ratio. It also means that after the financial crisis, property insurance companies should pay their attention to operational capacity, asset liquidity and solvency.Thirdly, there is an interpretation of the reasons for the changed of key risk points. The main reason for the change is the impact of financial crisis which changes the environment of insurance market.Finally, according to key risk points, there are some propositions about the risk management of domestic property insurance companies. The companies should strengthen the supervision of operational capacity, asset liquidity and solvency. Meanwhile, in order to get the best effect of risk early-warning and risk avoiding, companies should assign the limited resources to the supervision of self-retention premiums, premiums receivable, outstanding loss reserves and costs.