Research On Interest Rate Risk Management Of Life Insurance Companies In China

In the context of the continuous development of China's economic market,the life insurance industry,as an important market entity,has received increasing attention from the nationals,and premium income has grown at a faster rate.Since the life insurance industry is closely related to interest rates,interest rate changes will affect the life insurance industry.At this stage,China's interest rate marketization continues to deepen,which also means that the frequency and extent of interest rate volatility increase,while the marketization of life insurance rates continues to deepen,representing a more flexible pricing mechanism.Under the dual background of interest rate marketization and marketization of tariffs,the risk challenges faced by life insurance companies in operation and management,especially interest rate risk,are particularly severe.In addition,China began to implement the “second-generation” supervision system from January 1,2016.Interest rate risk is the most critical risk under the current “second-generation” framework,and interest rate risk management is of paramount importance.Therefore,this article is with regard to the research on interest rate risk management of life insurance companies in China,analyzes and recognizes the problems existing in interest rate risk management,and empirically explores the differences in interest rate risk management of life insurance companies with different premium scales,and summarizes and draw on the management experience.Finally,finding out the solution to improve the interest rate management level of life insurance companies in China is the main purpose of this paper.This paper mainly studies the interest rate risk management of China's life insurance companies in the process of interest rate liberalization,and develops according to the analysis of the status quo,problems found and suggestions.This paper consists of four parts.The first part describes the complexity and seriousness of life insurance risk management of life insurance companies by summarizing the connotation,causes and influences of life insurance companies,as well as asset liability management and gap management theory.The second part analyzes the current performance of interest rate risk of life insurance companies in China from the overall perspective,and then combs the current situation of interest rate risk management of life insurance companies in China,and finally summarizes the main problems.In the third part,from the perspective of micro and individual,through empirical analysis and case analysis,the differences in interest rate riskmanagement of life insurance companies with different premium scales in China are analyzed.In the empirical part,the interest rate sensitivity gap model is constructed by using the annual public annual report data of each company.The interest rate risk indicator is used in the time point analysis to analyze the interest rate risk of the 10 different premium life insurance companies horizontally.In the time period analysis,observe each the changes in the indicators of different interest rate cuts and interest rate hikes of the insurance companies in 2010-2017,analysis of the interest rate risk management decision-making and management in the different interest rate fluctuations.In the case part through the specific analysis of the differences between the asset end,liability side and asset-liability matching of China Life Insurance and Huaxia Life Insurance with special characteristics,and finally summed up the experience and enlightenment of life insurance risk management;Chapter IV,based on empirical analysis conclusions and inspirations,it suggestes specific countermeasures to improve the level of interest rate risk management of life insurance companies in China.This paper adopts the combination of qualitative analysis and quantitative analysis.The main result of empirical research is that life insurance companies generally have different interest rate risks,but interest rate risk management levels are different.Among them,large and medium-sized life insurance companies have strong interest rate risk management awareness,but there are time lags in management decisions.The management mechanism is not flexible enough.Small and medium-sized life insurance companies lack interest rate risk management talents,and their interest rate risk management awareness is poor,which may lead to management decision errors.Through case analysis,both China Life Insurance and Huaxia Life Insurance have interest rate risks.There are differences and shortcomings in interest rate risk management in asset side,debt side and asset-liability matching.Overall,the life insurance market's ability to manage interest rate risk is still immature.Therefore,at the end of this paper,some suggestions are put forward to improve the level of interest rate risk management of life insurance companies in China.