Comparative Study On The Investment Performance Of Life Insurance Company

The operation of the life insurance companies are with the characteristics of high liabilities and long-term. Both liabilities business and assets business are the fundamental operation of a life insurance company. All the business, including operation, efficiency and risk management etc. presents a series of quantified financial indexes. And the investment performance is important to all the financial indexes, which has direct effect on the short-term financial operating results, interest margin, investment portfolio composition and solvency and so on. Also, the investment performance is significant influence on the various stakeholders. Investment performance is a key factor to determine the competitiveness of products, long-term value and short-term profit, solvency etc. of a life insurance company. The core quantitative index of investment performance is “Return on Investment”(ROI), although the cost of risk should be taken into account when talking about investment performance.ROI is to reflect the investment performance. The CSRC requires disclosing ROI in the periodic report of listed insurance companies, but there is no standard and clear definition and calculation method about this index. And there is no regulatory requiring unlisted insurance company to disclose this index. Most of the stakeholders of life insurance companies are unable to obtain the internal investment and actuarial data related to investment performance. They can only compare and analysis the investment performance through the public information of periodic report of listed life insurance companies and the annual report of unlisted life insurance companies posted in their website. Unfortunately, these boring financial data are confusing, unintelligible and hard to compare, which may lead to misunderstanding. It is not easy to understand the abundant and real information behind these financial data. Therefore, the significance of disclosure may greatly reduce.We can make the investment performance analysis of life insurance companies from many aspects. However, for the external financial statements users, who cannot obtain the companies’ internal investment and actuarial data, it is particularly important to compare and analysis the investment performance from the financial statements perspective. While it is also important for the internal accountants of life insurance companies to understand the views of outside valuation institutions related to the ROI.Therefore, this article stars from the comparison and analysis of ROI of the four A shares listed life insurance companies on the perspective of interpretation of the financial statements. And further to discuss the main factors which could have influence on the comparison and analysis of ROI; at the end, this article discusses the method to enhance ROI. It is easy to obtain the data and to understand the analysis method from perspective of interpretation of the financial statements, which presents the practical significance, no matter for the life insurance company’s own researching and horizontal comparison among the industry so as to enhance the ability of management, or for the consumers choosing their potential insurer based upon the investment performance, and or for the investors of insurers judging the value of potential investment objectives.