The Influence Of Macroeconomic Fluctuations On The Profitability Of China’s Life Insurance Companies

At present,the domestic economic growth is weak and the growth rate is declining.The “new normal” has become a new term for the economy.The central bank stimulates investment demand with loose monetary policy and achieves the goal of stabilizing economic growth and promoting employment through interest rate cuts.The development of the market economy will inevitably lead to fluctuations,and the development of the life insurance market is inseparable from the impact of the entire economic environment.In recent years,the competition among the main players of life insurance companies has intensified,and the current macroeconomic situation is not optimistic.The overall profitability of life insurance companies in China is not good.This paper studies the impact of macroeconomic fluctuations on the profits of China’s life insurance companies from both theoretical and empirical perspectives.Firstly,combined with the status quo analysis,China’s macro economy is currently in the L-shaped curve bottoming period and adjustment period,The company’s underwriting profit is in a state of continuous loss.The operating profit mainly comes from the return on investment.The profit model is mainly based on the “Haipai style”model;secondly,from the theoretical point of view,qualitatively analyze the impact of macroeconomic fluctuations on life insurance product demand,life insurance company underwriting profit and life insurance company investment income.Finally,the empirical analysis of the impact of macroeconomic fluctuations on the profitability of China’s life insurance companies: in the long-panel data model,the asset profit margins of five life insurance companies in China were selected as explanatory variables from 1998 to 2017,and the GDP from 1998 to 2017 was used as an explanatory variable for analysis.In the short panel data model Among them,the asset profit rate of 20 life insurance companies in China was selected as the explanatory variable from 2010 to 2017,and the insurance fund utilization rate,earned premium,comprehensive expense ratio,solvency adequacy ratio and GDP were used as explanatory variables.The empirical results show that macroeconomic fluctuations have a positive effect on the profits of China’s life insurance companies,and the profitability of life insurance companies in China has a procyclical characteristic.At the same time,insurance funds use yields and earned premiums alsohave a procyclical characteristic and life insurance companies.Profit has a positive effect,from an empirical perspective,China’s life insurance companies are currently operating on a profit-oriented model dominated by investment income.From a long time horizon,the impact of changes in GDP on the asset profitability of life insurance companies is more significant.The macroeconomic fluctuations have a great impact on the profit level of life insurance companies.