Discussion On The Optimal Portfolio Of China’s Insurance Funds

Underwriting business and investment business are the main profits ofinsurance companies. After China joined into WTO, foreign insurancecompanies widened their business to investment area, currently11companies have obtained QFII qualifications, which supply a reference tothe Chinese insurance companies. Insurance investment in China hasaccumulated a lot of investment experience through more than twentyyears’ development and had a certain scale, but there still have manyproblems need to be solved. Deeply reform the use of insurance funds,push the operation of insurance funds to be more professional, normativeand marketable, continually expand the channels and scope of funds willbe the urgent problems need to be solved in the coming future.Based on the above background, this paper firstly introduces theliterature on the using of insurance funds and the modern portfolio theory.Secondly, this paper reviews the history of insurance funds’ operation inChina, analyzes the current situation of insurance funds using and pointsout the current problems of fund using, links international investment experience from developed countries and areas, proposes what worthlearning in the future development. The most important thing is followingthe regulations of insurance investment, identify the optimal proportion ofinsurance funds investment and solve the irrational problem of insuranceasset allocation. Accordingly choose the one that satisfied the restrictionof VaR based on analysis of insurance asset allocation, this paper putsforward the optimal proportion of investment for current investment inChinese insurance industry, meanwhile, proposes related policies andrecommendations that improve insurance investment.