Fixed-income Investments Of Insurance Institutions Risks And Countermeasures

With the growth of national economy, China's financial markets develop rapidly. Among the domestic financial markets, the insurance industry has stood out and become bigger and stronger in recent years. Up to the end of 2009, the total assets of the insurance companies reached RMB3.7 trillion and the investment funds of them reached RMB3.4 trillion.The key point of managing these investment funds lies on the bond market and fixed-income vehicles. The reason of that is around 80% of total investment funds in most insurance companies invest on fixed-income vehicles. The return of the fixed-income vehicles determines whether the success of the investment funds management and will ultimately becomes the important factor of insurance companies'core competitiveness and solvency.Throughout this report, I use the fixed-income vehicles experiences from foreign companies as the basis of analysis. I find although there are more advanced financial markets in developed countries, the fixed-income vehicles are the most important investment tools for insurance investment funds. Under the system of insurance investment funds risk management, fixed-income investment achieves the preservation value of the insurance investment funds, the operation of insurance companies, and profit growth. While the risk of fixed investment in domestic market mainly includes interest rate risk and credit risk. Through theoretical and empirical analysis in this report, I propose the suggestion of fixed-income investments management and policy recommendation for the regulatory authorities.