Research On The Improvement Of Insurance Asset Allocation In China

Since China launched reform and opening up 40 years ago,China's insurance industry has experienced the stages from exploration period to strict control,and then to the market reform period.In recent years,with the implementation of the new Insurance Law,the CIRC's merger with CBRC,and the stipulation of a series of administrative measures for insurance capital investment,China insurance has entered into the strict supervision stage.At the same time,insurance companies have experienced rapid expansion with the scale of funds managed by Chinese insurers growing continuously and has now become a vital part of China's capital market.On the other hand,with the advancement of financial liberalization,competition amongst market players has been fiercer.As mortality spread is basically stable,to maintain competitive advantage in the market,insurers have been shifting focus towards their asset allocation and investment capability to generate profitability.Competitive investment capability not only enables insurance companies to profit more on the basis of their existing business,but also increases product attractiveness and leads to the synergy of incremental insurance policy premium income.This paper tries to study China insurers' asset allocation strategy.Part One introduces the research background and literate review on insurance development and its asset allocation.Part Two makes an in-depth analysis of the current situation of asset allocation and investment return of insurance companies in China.Part Three mainly describes the present situation,development logic,experiences of and comments on insurance asset allocation in the developed markets like the United States and Japan.Part Four is the empirical section,where the author takes China Life Insurance as a case,analysing its historical trend of its asset allocation ratio,and based on the classic Markowitz Portfolio Model,looks for China life's optimal asset allocation ratio,with comparison to its actual proportion and suggests future improvement measures.Part Five summarizes the paper from the perspectives both of insurers and the regulator,that how general principals should be followed to better insurance asset allocation.