Research On China’s Life Insurance Funds Investment And Risk Control

With the opening of life insurance business in China, the competition of life insurancemarket is becoming more and more fiercer.The traditional underwrite business gainslittle,even have a great deficit,and for the life insurance coompanies,the application offunds becomes an important source of interests.With the development of finance marketand the increase of premium income,life insurance companies have become one of themost influential institutional investors in China’s capital market.How to use the lifeinsurance funds better is the key to the survival and development of life insurancecompanies in China.With the China Insurance Regulatory Commission loosening the restrictions ofchannels and proportional limits,the application of life insurance funds get boarder spaceof advancement.Meanwhile, the application of life insurance funds are facing increasinglycomplex market risk while gaining fat profit.This requires the life insurance companies setup a market risk prevention mechanism while pursuing benefit maximization.Especially inthe context of global competition,improving the capacity of risk controlling means a lot tothe application of life insurance funds.As a result, this paper analyzes the application ofChina Life Insurance Co. Ltd.’s funds,hoping to put forward some practial approaches tothe application of life insurance funds and market risk controlling.Firstly this paper states the relevant theories like Asset-Liability Management Theory,Modern porriolio Theory and Value at Risk,then analyzes the application of China LifeInsurance Co. Ltd.’s funds,summatizes a few existing problems.After that this paper usesVaR,Component-VaR quantitatively analyse the specific situation,subdivides the wholemarket risk into the specific investees.Then this paper overviews the application of life insurance funds and risk controlling status in Japan,summarizes a variety of experiences that China’s life insurance companiesmay use for reference.Finally,the paper proposes a few specific solutions to improve theapplication of life insurance funds and market risk controlling in China.