Research On Application Of Alternative Investment With Insurance Funds

For decades, China’s insurance industry experienced a tortuous and difficult development. As an important aspect of the insurance industry investment of insurance funds also followed the development of the industry and the orientation of policy ups and downs. Up to now,the overall investment of insurance funds has although exceeded 10 trillion,but investment investment business still faces low rate of return on investment, imperfect investment channels, Irrational asset structure and so on.Exploring the stable and healthy development of insurance funds investment and Improving the overall rate of investment have become top priorities of theoretical research and practice.Alternative investments are removed in addition to the open market investment products, including debt investment plans, private equity investment, real estate investment and so on. Investment is an effective complement to traditional investment business,with a long term, a higher return on investment, etc.. Since 2012, The regulatory policy of alternative investment of insurance funds had been gradually liberalized,providing new opportunities for the insurance group with capital investment. Insurance agencies have planned to participate in alternative investments or establish specialized investment companies and other forms of participation therein.However, duing to the emerging market soon, and alternative investment products are generally single investment is large(hundreds of millions to hundreds of billions of varying amounts), insurance funds in practical used for the control of risk and return requirements are very important. Both through alternative investments improve overall ROI Group, but also effectively control investment risk, which are the focus of this research problem.Firstly,by combing the surroundings and the development of alternative investments of the insurance industry, this paper analyzes the practical application of alternative investments exist among some of the potential risks, such as blindly faith in the high return on investment, believing in a variety of security devices and ignoring the inherent product risk. We can not effectively spread the non system risk. It is difficult to deal with cyclical changes in the investment environment.Secondly, this paper selected Ping An as an object reference in the insurance industry which has a good development in the field of alternative investments, and an outstanding ability of risk control.Then we analyzed Ping An investment allocation in the field of alternative investments, quantified the income of alternative investments and analyzed in detail the means of effectively controlling investment risk. The means including the group’s overall efficient organizational structure, such as the scientific investment decision-making mechanism, strict standard operating procedure, effective incentive and restraint mechanisms, etc..It provides guarantee for the efficient operation of group investment decision-making and the control of investment risk. There are also specific investment strategies on the diversification of investment strategies, by configuring different types of alternative investments. It disperses in the portfolio risk at the same time, and effectively improves the overall rate of return of insurance funds.Then this paper puts forward the overall proposal aiming at the existence of insurance industry risks in the absorption of Ping An outstanding on the basis of practical experience. Starting with the structure of the group, the overall internal investment decision-making process can be optimized, and investment risk be strictly controlled. According to the situation of the company a diversified investment strategy can be adopted to share the non systemic risk. In the group’s internal departments, the company established a risk isolation wall system, avoiding the interests of the relationship, resulting in significant losses of investment. The company can introduce the investment team which are suitable for the company’s development strategy, and develop the alternative investment under the risk control process.Finally, the paper summarizes the system and puts forward the prospect of the alternative investment of insurance funds.The expectation is that the alternative investment can have great development under the trend of mixed operation in the future. In the overall rise in the same time, the quality of investment products have a stable risk control, so that the alternative investment in the insurance industry can be healthy and stable development.This once again proves the significance of this study.