Research On Life Insurance Enterprise Valuation

In recent years,asset evaluation as an emerging subject,has made certain progress in China's service industry.As a branch of asset valuation,enterprise evaluation has played a significant role in mergers,acquisitions,or even in the area of investment.The life insurance business as an important part of the corporate sector,it is becoming an indispensable appraisal target of enterprise valuation,whether from life insurance company's own management needs,or from the perspective of mergers and acquisitions,to find the right approach to life insurance enterprises valuation has a very important practical significance.Firstly,the paper fully described the life insurance enterprises valuation method — absolute valuation and relative valuation method,and one by one analyzed,pointing out at this stage,the most common and most suitable life insurance enterprise evaluation method is the embedded value method,and then introduced it.Secondly,pointed out two problems in the practical application of embedded value method: the adjusted net assets overstated the life insurance company owners' equity item,double counted;the value of new business does not involve the issue of new business multiplier to calculate.According to the existing problems,the paper amended the item of the adjusted net assets and improved new business multiplier,in order to make the valuation result using the improved embedded value more in line with the market value of the life insurance enterprise.Based on the overall development of China's life insurance industry and insurance company's specific development characteristics,the paper integrated the factors of brand effect,the level of management and so on to improve the new business multiplier.Specifically,according to the actual situation in China,the article used the CAPM model to chose the appropriate risk discount rate and obtained the new business growth based on the development characteristics of life insurance company and China's life insurance industry,and then used the three-stage growth model to calculate the new business multiplier.Using the method to improve the new business multiplier is to better calculate the future value of new business,so as to make the evaluation value closer to the market value.In order to illustrate the applicability of the method,the paper selected the representative Chinese Life and China Pacific Insurance,calculated the risk discount rate,new business multiplier in base of the embedded value report,and then got the market value.Finally,the article explained the applicability of the improved embedded value method in life insurance enterprise value assessment.