Research On Risk Management Of CPIC In The View Of Economic Capital

At present,the domestic economy has changed from high-speed growth to highquality development,coupled with trade frictions,which have had a significant impact on China's economic variables,industrial structure,and industry cycle.Meanwhile,the insurance industry is in the "three-phase superposition" stage.CPIC,as a leading diversified insurance group in China,has started the strategic transformation 2.0 era in the face of intensified macro,industry and business risks.It adheres to the core business excellence and professionalism,attaches importance to improving risk management capabilities,and guarantees operations,and solvency.Economic capital is an important concept in the field of risk management.It is the amount of capital held by an insurance company to maintain solvency based on its overall risk level based on the interests of policyholders,creditors or owners.Economic capital is of great help to CPIC's adaptation to the external environment,improvement of internal control,and optimization of capital allocation.It can also help CPIC to reasonably measure risk appetite and maximize shareholder benefits while responding to stringent regulations.The research in this paper is based on the above background,combined with economic capital and risk management related theories,to study the risk management of China Pacific Insurance.First introduce the basic situation of China Pacific Insurance,and then use the TailVaR method that meets the principle of consistency and is commonly used in the measurement of economic capital of insurance companies and the operating data of China Pacific Insurance from 2009 to 2018 to calculate economic capital to obtain the economics of each insurance type and three main businesses capital.Further,by using the correlation coefficients of these three main businesses,the overall economic capital of CPIC Group can be integrated,and the integration of economic capital can reflect the risk diversification effect of CPIC on various businesses.Finally,calculate RAROC on the basis of economic capital,so as to compare and evaluate the risk management of each business of China Pacific Insurance.The empirical results show that with a confidence level of 99.99%,the economic capital of CPIC life insurance business is 27.214 billion yuan,the economic capital of property insurance business is 27.623 billion yuan,and the economic capital of asset management business is 555 million yuan.In the end,the overall economic capital of China Pacific Insurance Group was 40.072 billion yuan.After integration,62.63% of the risk was dispersed.On the basis of economic capital,the RAROC of each main business and the group as a whole was further calculated,and RAROC was used as the core to evaluate CPIC's risk management efficiency.The results showed that the RAROC of the life insurance business was 50.91%,the RAROC of the property insurance business was 13.11%,the RAROC of the asset management business was 47.17%,and the overall RAROC of the group was 44.97%.The efficiency of life insurance business of the three main businesses is higher than that of the group,because its net profit accounts for 76.9% of the entire group,and the risk diversification effect is very high;due to the large number of insurance types,the property insurance business faces greater risks,but the risks are diversified The effect is not high,so the amount of economic capital is large,and the RAROC value is also significantly lower than the group;while the amount of economic capital of the asset management business is small,and the RAROC value is also slightly higher than the group value,which shows that this business has a higher risk control efficiency.Finally,based on the above research conclusions,the article puts forward the following suggestions to China Pacific Insurance's risk management system: first,it is necessary to pay attention to the risk management of property insurance business;second,it is to strengthen the risk diversification effect of each business;third,it is necessary to pay attention to the application of economic capital and strengthen The fourth aspect of enterprise economic capital culture is to pay attention to the evaluation index of risk management effectiveness-RAROC.