Research On The Impacts Of Investment Business On The Operating Performance Of Insurance Companies

Due to the large investment opportunities in the market in recent years,insurance companies have expanded their investment scale by setting up investment subsidiaries.Insurance companies expand their investment by setting up investment subsidiaries.After reserving a certain amount of reserves,the remaining insurance funds can be used for investment.The investment methods of insurance companies mainly include equity investment,bond investment,bank deposit,real estate investment and infrastructure investment.The scale of investment by insurance companies has been increasing,while the share prices of listed insurance companies have been falling.This paper focuses on the methods of insurance companies’ involvement in the investment field,and finds the correlation between insurance company performance and the expansion of investment business,which has certain practical significance.This paper calculates the impacts of investment on the long-term performance and the performance during the window period of insurance companies.By establishing a time series model to measure the impact of expanding investment business on the long-term performance of insurance companies,based on the data of balance sheet,income statement and cash flow statement of listed insurance companies.This paper studies the impacts of investment scale and investment income of insurance companies on the return on equity of enterprises,and draws a conclusion that the expansion of investment scale of insurance companies has a negative significant relationship with enterprise performance.Investment income has a certain impact on the overall performance,but it is also related to the cost of investment and the ability of investment income to be converted into cash flow.For the empirical regression results of the time series model,subsample regression and endogeneity test were used respectively to test robustness.As for the impact of investment events on the performance of insurance companies during the window period,this paper uses the event study method to calculate the abnormal rate of return and cumulative rate of return,and draws the conclusion that expanding investment business cannot improve the stock market value of enterprises during the window period.By judging the flow of insurance funds,testing the profit quality of operating activities,calculating the ability to realize investment and analyzing other important financial indicators.This paper finds that in operating activities,the value of core profit of the same caliber is close to the net cash flow of operating activities,indicating that insurance companies have good profit quality and the ability to convert into cash flow in operating activities.In the investment activities,the income from investment can not be converted into cash flow.Based on the above analysis,this paper believes that insurance companies should return to the insurance business,reduce investment appropriately,use more funds in insurance business,improve the quality of insurance products,services and reputation in the market,so as to improve premium income and improve the performance of insurance companies,and form a virtuous cycle.