Study On The Impact Of Investment Life Insurance Products On The Solvency Of Life Insurance Companies

With a number of life insurance companies acquiring high quality enterprises and holding a lot of shares in the capital market,investment life insurance products have received a lot of attention.However,the regulation and rectification of investment life insurance products also came along,and "insurance as insurance" became the main theme of the industry.Although the rapid development of investment life insurance products,which are characterized by short and long term investment and high expected return,can increase the premium scale,it may adversely affect the solvency of life insurance companies under the risk-oriented "Solvency II" regulatory system,and may bring about systemic financial risks in serious cases.Therefore,this paper studies the impact of investment life insurance products on the solvency of life insurance companies in the context of the implementation of "Solvency II",which is of strong practical significance.In the theoretical analysis,this paper summarizes the factors influencing the solvency of life insurance companies and analyzes the impact mechanism of investment life insurance products on the solvency of life insurance companies based on the three pillars of "Solvency II".In the current situation analysis section,the paper analyzes the current situation of investment life insurance products and the solvency of life insurance companies.In the empirical part,this paper selects 48 life insurance companies from 2015-2020 as the research sample,collects the financial data and solvency data of insurance companies,uses the comprehensive solvency adequacy ratio as the explanatory variable,the percentage of investment-based life insurance products as the key explanatory variable,and selects indicators from four aspects of profitability,operational capacity,growth capacity,and company size as control variables,and uses a variable intercept The regression analysis is conducted using a fixed-effects model with variable intercept.Through the above analysis,the paper concludes that investment life insurance products have a suppressive effect on the solvency of life insurance companies;the suppressive effect of investment life insurance on solvency is stronger for insurance companies with high operating performance.Based on the findings of the study,it is recommended that,first,life insurance companies should reasonably develop investment-based life insurance products,improve their business structure and optimize asset allocation in order to improve solvency.Second,the regulatory authorities should further improve the supervision of the terms and conditions of investment-oriented life insurance products,and improve the solvency supervision mechanism of life insurance companies to help the healthy development of the insurance industry.Third,consumers should view investment life insurance products correctly and establish a correct investment concept.This paper has the following three innovative points:(1)There are innovations in the content of the research.Most of the research on the relationship between investment life insurance products and solvency in the previous literature focused on the period before the implementation of "Solvency II",but there are not many studies on the period after the implementation of "Solvency II".(2)there is an innovation in the selection of indicators.From the stock perspective,the ratio of liabilities of investment life insurance products’ investment accounts to total liabilities is selected as the key explanatory variable to measure the share of investment life insurance products;(3)there is an innovation in the heterogeneity analysis.For the first time,this paper regresses the sample in groups according to the high and low business performance of enterprises to study the different effects of investment life insurance products on the solvency of life insurance companies under different business performance.