The normal operation of insurance companies is driven by underwriting business and investment business. Insurance companies are not only social risk protection institutions that provide insurance business, but also one of the most important non-bank financial institutions, engaged in investment and business activities. This enables it to obtain investment profits other than underwriting profits, greatly enhancing its solvency. The use of insurance funds is as important to the development of the industry as the expansion of insurance business. Since the insurance industry resumed business in China for 20 years, the insurance business has maintained an average annual growth rate of 30%, which is much higher than the average annual growth rate of GDP of 9% in the same period. However, the use of funds in China's insurance industry is not satisfactory. For a long time, China has restricted the investment direction of insurance funds. The use of funds is limited to bank deposits and national debt, and the investment channels are very narrow and the investment efficiency is very low. According to statistics, in order to ensure the safe use of insurance funds, 40%-60% of insurance assets are deposited in banks, but the interest rate has been lowered several times and 20% interest tax has been levied, which makes the income from bank deposits negligible. At the same time, the income of government bonds, financial bonds and corporate bonds has also fallen sharply, and insurance companies are facing a serious problem of "poor profit and loss". China's trillions of insurance funds, most of which are premium income, are liabilities of insurance companies to policyholders. Faced with an annual premium income growth rate of 30%, insurance companies are facing greater repayment risks. At the end of July, 2005, China Pacific Life received a "red" warning from the China Insurance Regulatory Commission, and the accusation that "the solvency gap was 9 billion yuan" made China Pacific Life become the target of public criticism. Hao, an insurance expert at the Central University of Finance and Economics, pointed out: "Insufficient solvency is not a unique problem of Pacific Life, but a common phenomenon in the entire insurance industry, but the severity of each company's problems is different." [1] As the only way to improve the solvency of insurance companies, the investment technology of insurance funds must be paid attention to.
2. Analysis of investment tools
1998101On October 20th, insurance companies were allowed to enter the national interbank lending market to engage in bond trading; 1999101October 26th, the State Council approved insurance companies to enter the securities market indirectly through securities investment funds; In February 2004, insurance companies were allowed to enter the market directly. With the continuous expansion of asset scale, the continuous promotion of system reform and the gradual widening of application channels, insurance funds are invested in financial markets such as bonds, stocks and funds. The following is a simple analysis of the main investment tools of China's insurance funds:
2. 1 money market investment tools
1) Bank deposit
The advantage of bank deposits is good liquidity, which can not only preserve and increase the value of insurance funds, but also ensure their safety. However, the deposit income of insurance funds is meager. At present, the main form of insurance fund investment in China is bank deposit, in which large-sum agreement deposit is the main form. Most of the agreed deposits are five years, and the term concentration is too high, so there is a risk of reinvestment. [ 1]
2) interbank lending market
Interbank lending is a market where financial institutions conduct short-term financing activities in the form of monetary lending. It has the characteristics of low risk and short term, and can provide a stable channel for maintaining and increasing the value of short-term insurance funds. At present, because China's interbank lending market is not standardized, there are still many problems in the intermediate links of market transactions, and the bond market is not liquid enough. Cash trading is almost at a standstill, so the scale of insurance funds entering is not large.
2.2 Securities investment tools
1) bonds
Bond is a bond debt certificate issued by various social and economic entities to bond investors in order to raise funds, and promises to pay interest regularly at a certain interest rate and repay the principal at maturity. The interest rate of bonds is generally higher than that of bank deposits, so their investment income is usually higher than that of bank deposits. The national debt known as "Phnom Penh bond" basically has no default risk [2]. Apart from bank deposits, most of the funds available to China's insurance industry are used to buy government bonds. After the strategic transformation of insurance asset structure, the proportion of bond investment in the use of insurance funds has exceeded bank deposits, and insurance institutions have become the second largest institutional investors in the bond market after banks.
2) Securities investment funds
Securities investment fund is a kind of collective securities model with * * * income and * * risk. Securities investment funds are operated by investment experts, and diversified investments are made according to portfolio theory, so as to minimize risks and increase returns to the highest level. In addition, funds can be recovered through redemption, which is convenient for investors to advance and retreat [3]. Therefore, although its investment risk is less than that of stocks and greater than that of bonds, its income is generally greater than that of bonds.
Securities funds are divided into open and closed types according to whether the income vouchers can be redeemed. Open-end funds, also known as additional investment funds, can issue new funds or funds redeemed by investors at any time according to market supply and demand. Its investors can buy directly from fund management companies or through distributors at any time. Closed-end funds are called public offerings and mutual funds. The total capital and the number of shares issued are fixed and cannot be added, subscribed or redeemed. At the beginning of its establishment, investors can buy from fund management companies or consignment agencies at face value or specified price; After the issuance is completed or the fund is listed and traded, investors can only buy at the market price in the securities trading market through brokers. When you buy below the market price, you can get the average income; If the discount (below the net asset value) is enlarged, the income may be reduced.
3) stocks
Stock is a certificate issued by a joint stock limited company to prove the identity and rights of investors and obtain dividends and bonuses. The size of stock returns depends on the company's operating conditions and profitability. Under normal circumstances, the income from investing in stocks is higher than the interest income from bank savings and the interest income from bonds. The profitability of stocks is also manifested in the fact that holders can use stocks to obtain interest spread income and realize currency preservation. Corresponding to profitability, investors should also bear greater investment risks. But stocks are liquid and can be cashed in the stock market at any time.
There are two kinds of stocks: common stock and special stock. Common stock is the most risky stock, and its dividend and dividend income are uncertain, but fluctuate with the company's operating conditions and profitability, and must be paid after the company's debt interest and the interest of preferred shareholders. Preferred stock, as a special stock, has a fixed dividend yield when it is issued, and the dividend yield is not affected by the company's operating conditions and profitability. Coupled with the unparalleled priority of common stock, its risk is less than that of common stock. However, because the dividend of preferred stock is fixed, its shareholders cannot share the benefits of the company's profit growth.
3. International comparison
With the continuous enrichment of insurance investment tools, the investment risks in the insurance industry have been dispersed to a certain extent, and the use of insurance funds has been continuously strengthened. By the end of July this year, the total assets of China insurance industry had reached 1.38 trillion yuan, an increase of 26.5% over the beginning of the year; The balance of insurance funds was 1.26 trillion yuan, an increase of 2 1.5% over the beginning of the year. With the continuous strengthening of the use of insurance funds, China's insurance industry expects to rely on the securities market to achieve a healthy development model of insurance and investment, and the securities market expects the insurance industry to provide long-term and stable capital supply through multiple channels. This harmonious and win-win pattern has already begun to appear. However, compared with international counterparts, there are the following gaps in the use of insurance funds in China:
3. 1 Unreasonable investment structure
According to the above analysis of investment tools, the investment tools are prioritized according to the following different principles:
Securities: treasury bonds = bank deposits > other bonds > interbank lending > securities investment funds > stocks.
Profitability: common stock > preferred stock > open-end securities investment fund > closed-end securities investment fund >: other bonds > interbank lending > national debt = bank deposit.
Risk: common stock > preferred stock > open-end securities investment fund > closed-end securities investment fund >: other bonds > interbank lending > national debt = bank deposit.
Liquidity: stocks > open-end securities investment funds > closed-end securities investment funds > bonds > interbank lending > bank deposits.
Although safety is the first investment of insurance funds, for the benefit of insurance companies, we should invest in higher-yield areas on the basis of considering risks. However, judging from the investment situation of insurance funds in China over the years (as shown in table 1), more than 35% of insurance assets are bank deposits, 15-25% are government bonds, the proportion of securities investment funds is less than 10%, and the scale of stock investment is far less than the limit of 5%. In other words, the profitability, liquidity and safety of China's insurance funds have not been well balanced and matched, mainly concentrated in low-yield interest rate products such as bank deposits and bonds. Statistics show that during the four years from 2000 to 2003, the return on investment of insurance industry in China was 3.59%, 4.3%, 3. 14% and 3.1%respectively, and the average return rate was only 3.54%, which was far lower than that of international counterparts10. In countries with developed insurance industry, such as the United States, the investment of insurance in bonds, funds and stocks is above 80%, and that in Britain is above 70%. Its high income comes from efficient and diversified capital utilization.
Table 1 Proportion of Insurance Funds in China
The total assets ratio is1999 2000 2006 5438+0 2002 2003 2004 2005.
Bank deposits 35.56% 35.60% 42.50% 46.60% 49.9% 41.9% 35.8%
National debt 26.05% 28.33%17.33%17.06%15.42% 22.37% 23.76%
Securities investment fund 0.57% 3.96% 4.55% 4.74% 5.09% 5.68% 7.48%
3.2 Stock investment started late and the scale was small.
China's insurance funds were allowed to directly enter the stock market in 2004, and the investment ratio was limited to 5%. However, insurance funds really entered China in February 2005. Theoretically, according to the market entry rate of 5%, about 60 billion yuan will be directly invested in stocks, but so far, the investment in the market is only over 4.5 billion. Statistics show that the proportion of stock investment in European countries is relatively high. For example, the proportion of stock investment in Britain was about 20% before11960, and it rose to about 50% in the 1990 s, and has remained at this level. In recent years, the proportion of stock investment in the United States, Japan, South Korea and other countries fluctuated between 20% and 30%. In addition, at present, the stock investment of insurance funds in China is in the trial stage, and the investment intensity is mainly in the primary market.
3.3 Limited investment areas
Although the investment channels of insurance funds in China have been greatly broadened, compared with the western insurance investment fields, China should actively seek new investment products suitable for China's insurance industry. The investment fields that China's insurance funds can expand include real estate, foreign investment, industrial investment and loans. Although these fields are highly specialized at present, which is quite different from the insurance industry, not only the liquidity is poor, but also there are many problems in the market, such as redundant construction, disorder and lack of credit, which are not suitable for China to intervene on a large scale now, it has become a possibility, even a trend, for the insurance industry to enter these fields.
3.4 Investment management technology gap
At present, China's insurance asset investment management is in its infancy, and there are still five gaps compared with international counterparts: in terms of investment philosophy, the idea of paying attention to value investment, rational investment, steady investment and long-term investment has not been fully established; In terms of investment technology, the methods of asset matching management, strategy allocation and portfolio management are not skilled enough; In terms of investment strategy, the depth and accuracy of judging and grasping the market situation need to be further improved; In the control of investment risk, there is still a lack of technical means of identification, measurement, early warning and hedging; In investment performance evaluation, scientific and unified standards and methods have not yet been formed [4]. As far as insurance funds enter the market, they stumbled in the securities market in 2004. On April 8, April 9 and April 22, 2005, three overseas listed companies (China Life Insurance, China Ping An and China Property Insurance) issued performance announcements one after another, and their investment performance was not satisfactory-China Life's realized investment loss and unrealized investment loss were 237 million yuan and/kloc-0 respectively.
4. Countermeasures
4. 1 relax investment restrictions and increase the proportion of entering the market.
Limiting the investment ratio of insurance funds is the most feasible supervision method, but the ratio can be appropriately increased, for example, the upper limit of the proportion of entering the market is 20%. For large insurance companies, unsystematic risks can be avoided because of the full diversification of investment.
The empirical data of foreign mature financial markets also prove this point: according to OECD statistics, the average return rate of American stock market is 10.3%, the bond market is 5%, and the money market is 3.7%, while that of Germany is 14.4%, 7.9% and 3.5 respectively. Comparing the rise and fall of American stock market from 198 1-2003 with the growth rate of American life insurance company's stock investment, it is found that the trend of the two is strikingly similar, and the correlation coefficient is above 90% through statistical software analysis. It can be seen that the degree of institutional investors such as insurance companies participating in the stock market is directly proportional to the rate of return of the stock market.
4.2 Recognize the nature of insurance funds and adopt different investment strategies.
Insurance companies should generally refine insurance products according to the repayment amount, time and interest rate sensitivity, so as to form relatively distinctive features on the whole, and then determine appropriate investment strategies and objectives according to the overall characteristics of each type of insurance products, formulate appropriate asset allocation and portfolio plans, and realize the general proportion of assets and liabilities [6]. As far as property insurance companies are concerned, their debt maturity is short, their payments are arbitrary, and they require high liquidity, which is more suitable for investment products with strong liquidity and high returns such as interbank lending and stock investment. However, life insurance companies have long liabilities and high requirements for capital security, so asset-liability matching management is very important when investing, which is more suitable for bank deposits, national debt and real estate. Equity assets such as stocks are positioned to meet solvency requirements. Generally speaking, the proportion of assets invested in stocks in the total life insurance account should be small.
4.3 Improve the investment management structure
Smaller insurance companies have investment departments, which are specialized in the operation and management of investment business. However, the nature and professional direction of the investment department are quite different from those of the insurance business department and the administrative department. Therefore, the establishment of an independent asset management company or investment structure by drawing lessons from foreign asset management structure is conducive to avoiding organizational friction between different businesses and improving the specialization of insurance investment business. Professional investment departments can effectively supervise and manage the asset-liability activities of each type of insurance and determine the best matching method of assets and liabilities.
At present, several large domestic insurance companies mainly use funds through insurance asset management companies. Because asset management companies have not been established for a long time, insurance companies either use fund investment teams to invest in stocks or re-establish stock investment departments through recruitment. Generally speaking, it takes a long time for relevant business personnel to adapt to the new investment business. At the same time, the relevant rules and regulations, risk control, custody and liquidation of stock investment of various companies have not been completed for a long time, which needs to be continuously tested and improved in the future investment work.
4.4 Establish an effective risk control system
With the increase of investment channels, the risks faced by insurance companies also increase. In particular, the China stock market lacks a short-selling mechanism and is full of speculative air, and insurance institutions are faced with systematic risks and non-systematic risks. When insurance funds directly enter the market, the company's net asset value will inevitably fluctuate with the fluctuation of the capital market. How to ensure that the assets of insurance companies will not be excessively damaged due to market risks and establish an effective risk control mechanism is the biggest issue facing insurance companies under the new situation.
The risk control system of an insurance company must meet the following requirements: it can effectively manage and control the investment process and ensure the consistency and repeatability of the investment process; It is very important for insurance companies operating in debt to ensure that the risks they bear are expected and correspond to the expected returns; Be able to effectively report the risk status of portfolio by using quantitative tools of risk management; Be able to track the marginal contribution of error risk (MCAR) of each asset, so as to find out the asset with the largest marginal contribution of risk; Review the investment style to determine whether it is contrary to the investment objectives; Test the investment strategy with past stock information and evaluate the possibility of future success; Establish a portfolio different from the benchmark investment style; Establish a firewall to ensure that the investment foreground and background are managed separately and control internal risks [7]. Establishing a perfect risk control system is an important step to control risks, but it is more important to control the moral hazard of traders. This requires the traders of insurance companies to have higher professional ethics and corresponding qualifications.
In addition, we should also pay attention to developing medium-and long-term investment projects with stable returns and rectifying the short-term investment market.