Study On Non-Life Insurance Industry Solvency With Corporation Size And Generalized Gray Incidence Model

The insurance industry plays an important the role of escort for the healthy development of national economies in the modern financial system. When the financial storm is raging in the world, the governments and regulatory agencies attach importance to financial risk monitoring more than ever, the risk of the insurance industry is an important aspect of regulation. There is no bankruptcy precedent of Chinese insurance companies; the insurance industry is also facing the same high-risk; especially the financial crisis has exacerbated the risk. In recent years, Chinese insurance industry has come into the high-speed development period, the process of rapid development has also had some problems; has also increased the risk of Chinese insurance industry. As for risk regulatory of insurance industry, the solvency regulation is the core. Research on the solvency of Chinese insurance companies has a practical significance.Solvency of insurance companies is the ability to repay their debts promptly. For non-life insurance companies, solvency is the capacity for compensation, reflecting a relationship between the assets and liabilities of insurance companies. Supervision of the insurance company solvency is not only conducive to the stable development of the insurance industry, but also to improve the company's risk control mechanisms. Risk analysis of insurance companies should start from the influencing factors for identification and quantification of the insurance risk. Researching solvency of insurance companies is the same, study the impact factors of solvency become the basis of solvency supervision. China insurance industry possesses two obvious characteristics of the high market concentration and less valid data. In this paper, 11 non-life insurance companies in our country are divided into two categories in accordance with the size scale, analyze company solvency factor with generalized gray incidence model.In this paper, introduce insurance company solvency and solvency risk factors firstly. Secondly, read"Management of insurance company solvency", this is considered for adoption in June 2008 in President Office of China Insurance Regulatory Commission. Further, compares and study the regulatory system of our country and Europe and the United States.Considering risk characteristics of our country, sum up 8 internal factors and 4 external factors, these factors are impact factors of non-life insurance company solvency. In the paper, select generalized gray incidence model in order to resolve the question about the less number of valid data. Based on the data in "China Insurance Yearbook" of 2005-2008, analyze internal and external impact factors of insurance industry solvency, and size down according to their degree of influence on solvency, and using of economic and insurance theory and practical experience explain the results.Positive analysis shows that their degree of influence on solvency is different because of different company scale. Operating stable index are higher degree of influence for large scale companies, while operating efficiency index are higher degree of influence for small scale companies. As for the external factors, the trend of macro-economic is more directly impact factor for large scale companies; the change of economic policy, especially the change of interest rate policy, will firstly transfer to smaller companies. Finally, combining the results of empirical analysis, make some reference to the recommendations on solvency of insurance company's supervision contents and methods for Chinese insurance regulators and insurance industry.