The Research On Credit Rating Of China Property Insurance Company

Credit ratings as the primary means to objectively and fairly evaluate default risks, is very important to solve the problem of information asymmetry between investors and investees, and is very helpful to take precautions against the potential risks. Therefore, credit rating of the insurance company which acts as the social and economic stabilizer is not only the necessary condition for the stable, healthy and rapid development of the economy, but also an important guarantee for Financial Deepening Reform. China's insurance industry, especially property insurance industry, has become one of the world's most important emerging markets during nearly 30 years of restoration and development, with the explosive growth in number and double-digit growth in annual premium volume. However, the difficult claims, the weak consumer protection, the low efficiency of supervision and other issues have hindered the development of the property insurance market. The root causes is the lack of credit system. Therefore, how to complete the construction of the property insurance industry credit rating system has become one of the most important issues in China's insurance industry.This article reviews the current research as well as the theory and the common methods about property insurance company's credit rating, briefly introduces domestic and foreign rating agencies'rating system, and their similarities and differences. On this basis, construct property insurance company's credit rating index system, joined "Chinese characteristics" in, such as "shareholder background," "registered capital" and so on, and then choose the factor analysis and cluster analysis to do the research after comparing the advantages and disadvantages of the common methods. This article selects 28 indicators of 64 property insurance companies as the research objects, finally adopts 22 indicators of 55 sample companies to do empirical analysis after sample selection, data processing and screening procedures to get relevant conclusions.The results show that our Chinese property insurance companies generally have higher credit rating than foreign property insurance company, which is caused by the semi-monopolistic nature of the Chinese insurance industry, and the age of the company. Finally, some suggestions are given according to the results to improve the credit rating system of the property insurance company in China.