Performance Evaluation Of Life Insurers In China

Over the past 30 years of reform and opening up, Chinese insurance industry has a forceful growth rate, which is much higher than GDP. Although the growth of the industry is slowing down since 2003, the increasing rate of the industry is still high in 2008 and 2010. The performance of the life insurance companies mainly depends on underwriting profits and investment income. In recent years, the premium rate is dropping down because of the competition of the market, which leads to the decline of the underwriting profit. The investment income is also not optimistic. In addition, the degree of products differentiation is low, for there are obvious access barriers in the Chinese insurance industry. However, the overall profitability is not satisfied, which contradicts the growth of the industry. In this condition, the most important issue is how to analysis and improve the performance of the life insurers. It is also the main major of this paper.Based on the qualitative and quantitative analysis, the paper is divided into six parts. Chapter 1 is about the background and significance of performance evaluation for life insurers. It also includes the structure of the research method. Chapter 2 is literature review and summarization on the embedded value theory and performance evaluation method, including both domestic and foreign scholars. Chapter 3 is about the improved Grey Relations Analysis. In this part, Single Measurement Criterion for AHP is used to determine the weights of the grey relation coefficients between indicators. Chapter 4 contains the introduction and application of embedded value theory. Chapter 5 is case analysis based on samples and gives several suggestions to improve the performance of samples. The last chapter is conclusion which reaches to the main points of the whole paper.The contributions of this paper are as following:(1) Use embedded value profits and shareholders'value instead of net profits and equity to measure performance. (2) Use Single Measurement Criterion for AHP instead of simple average method to determine weights in the process of Grey Relation Analysis.There are still several defections in this paper:(1) The results of the evaluation may be limited, for the indicators don't cover every part of the insurers'performance.(2) There are very limited ways to acquire embedded value reports for now, so the optimal value of the indicators can't represent the whole industry. It can be used in the comparison between the samples only.