The Strategy Of The Insurance Funds Invest To Infrastructure Under The Financial Crisis

The underwriting business and the investment business is the two pillars of the modern insurance company. The two business affect each other. Since the resumption of the insurance business in China, the premium of the insurance company grows every year, while the investment of the insurance company develops slowly. In particular,the financial crisis in 2008 had a terrible impact on the development of Chinese economy, especially for the insurance company, which made the premium grew slowly and the insurance company's investment to the capital market fallen sharply. In the current context,how to effectively use insurance funds to raise the insurance investment income has become the top priority of China's insurance industry.The Infrastructure construction is an important channel for the insurance investment. The investment to infrastructure construction is a long time,security one,which suits to the characteristic of the insurance investment. In order to stimulate economic growth in China, the authority issued a 4 trillion investment plans,while the infrastructure plays an important role in the plan.At the moment,to study the strategies and ideas of the insurance investing infrastructure construction has great practical significance to the insurance company.The first part mainly discusses the financial crisis's impact for the investment of insurance funds, as well as to expand investment channels for insurance funds thinking. Financial crisis is the direct reason of the decline of the insurance fund. But the insurance company unreasonable asset allocation, relatively few long-term asset allocation, invest less of China's listed companies and the speculation of China's stock market cause a serious decline of the insurance fund investment. The China Insurance Regulatory Commission has liberalized the insurance sector investment on the infrastructure investments,the investment scope and the investment ratio.In this context, the insurance should invest the Infrastructure construction, which could improve the investment return and promote China's economic growth.The second part mainly discusses the feasibility of the insurance fund investment to infrastructure construction. For investment in infrastructure construction,the funds of the central government and local governments is not enough,which provides a chance for the insurance funds.Then discussed the appropriateness of investing in infrastructure from the size of the investment cycle and capital, capital security and capital returns of the funds.Finally from the characteristics of infrastructure projects and net assets yield,the insurance funds should invest specific projects.The third section describes the insurance capital investment in infrastructure-debt investment. Credit risk, interest rate risk and completion risk is main risk. The insurance company shuld concrol these risk. At China's current economic situation, the insurance agencies should try to shorten the duration of the debt investment, reduce long-term debt of the amount of investment.The fourth section describes the insurance capital investment in infrastructure in another way-Equity Investment. It have high risk and hign profit.The profitability of the project risk, moral risk, liquidity risk and operational risk of the company is the main risk of Equity Investment,which the insurance should control. According to the economic cycle asset allocation strategy and at the China's economic situation, the insurance institutions should invest heavily in equity asset classes.The fifth section presents the advise for insurance company and the policy proposals for the regulators.Insurance companies should establish the right investment philosophy, investment in subsidiaries and the establishment of a professional and efficient investment risk management system.Regulators should be introduced to guidelines of the insurance equity investment, strengthen joint supervision of different sectors.The paper has possible innovations as follows:(1) In the context of the financial crisis and Chinese current economy, the proposed insurance agency debt and equity investment in infrastructure should be taken of specific strategies,(2) In China's current range of infrastructure projects,the author from the listed company's net assets yield rate proceeding of the insurance sector investment in infrastructure projects should be chosen,(3) On the basis of bank credit and private equity investments theory,the paper discussed the detail exposition of the insurance capital debt and equity investment in infrastructure risks and the related risk control measures.