Because of its competitiveness and flexibility in investment and operation, commercial insurance has become a financial intermediary to accumulate a large amount of capital in the world today and an important institutional investor in the capital market. In this regard, China itself has no realistic and sophisticated experience and lessons, so it can only carefully study the situation of western and emerging market countries and draw useful enlightenment from it. Don't hesitate when you turn around.
Commercial insurance institutions will be important institutional investors in China's securities market and the supporting force of the capital market in the future, and the capital market will also become a necessary source of strength for the survival and development of the insurance industry.
First, the rapid development and capital accumulation of the insurance industry in China.
In 1990s, the insurance industry in China developed rapidly, and the premium income increased by 25% annually. It is estimated that the annual premium income in 2000 will reach 240 billion yuan. The premium rate of China to 1996 is 1.26%, while the level of developed countries in the world is above 10%, and the emerging market country South Korea is1.61%,and South Africa is as high as/kloc-. This shows that the insurance industry in China has just started, which indicates that the insurance industry will concentrate more and more social capital. Income insurance and social endowment insurance have become important channels for capital accumulation in the world today. 1990 The total assets of life insurance companies and pension funds account for 97% of GDP in Britain, 75% in the United States, 78% in Singapore, 48% in Malaysia, 30% in Chile and 48% in South Korea (World Bank, 1995). Analyze the real purpose of mainstream funds and find the best profit opportunities! )
Commercial insurance institutions in developed countries are important institutional investors in the securities market.
1, the relationship between American insurance industry and securities market is increasingly close. Not only do most of the reserves of insurance companies invest in the securities market, but insurance companies themselves are also producing financial products with both insurance and investment functions.
From 65438 to 0990, the largest asset utilization of American life insurance companies was securities investment, accounting for 54%, of which bond investment accounted for 49.8%, preferred stock accounted for 0.7% and common stock accounted for 3%. Followed by assets used for mortgage loans, accounting for18.9%; Only 5.2% of assets are used in cash, short-term and other currencies; The net investment income of that year accounted for 25.96% of its total income. In order to ensure the safety of life insurance companies investing in the securities market, the general accounting standards implemented by the United States for insurance companies also have restrictive provisions: First, insurance companies should invest less money in stocks and junk bonds with low investment level, because these assets are risky, and the decline in market prices will reduce the surplus of life insurance companies and even endanger the interests of policyholders; Second, managers of life insurance companies are not encouraged to obtain benefits through overly complicated transactions (such as swaps) in the bond market, that is, to restrict their participation in the derivatives market.
199 1 At the end of the year, the assets of American property insurance companies were nearly $600 billion. Among their investment assets, federal government and institutional bonds account for 22%, local government bonds account for 36%, corporate bonds account for 18.4%, stocks account for 19.7%, and mortgages account for 1.4%. In addition, some policies of American life insurance companies directly constitute a series of securities products, which have both insurance and investment functions, including general life insurance, general variable life insurance, annuities and guaranteed investment contracts.
2. With the development of financial liberalization in Japan, the relationship between Japanese insurance companies and the capital market is increasingly close.
Under the competitive pressure of banks and securities companies to continuously develop high-profit new financial products, insurance companies continue to break through the original traditional restrictions and develop into "comprehensive financial institutions"; Allowing people's life insurance companies to lend directly to speculative enterprises not only led to the reform of the insurance management system, but also meant that the government further relaxed the policy of insurance companies participating in the securities market, thus making the relationship between Japanese insurance industry and securitization increasingly interdependent from the late 1980s.
Third, the relationship between the insurance industry and the securities market in China.
China's insurance institutions mainly use cash and bank deposits as insurance reserves, accounting for nearly 50%, which is more than 10 times higher than that of the United States. Therefore, insurance companies have actually become indirect providers of bank credit funds: investment expenditure only accounts for a little more than 1/5, far below the level of 80% in the United States. This at least reflects the following noteworthy aspects:
1, legal restrictions.
The Insurance Law, which came into effect on June 1995, clearly stipulates that the use of funds by insurance companies must be prudent. The use of funds is limited to bank deposits, buying and selling government bonds and financial bonds, and may not be used to set up securities institutions or investment enterprises. The specific proportion of funds used by insurance companies and various project funds to their total funds shall be uniformly stipulated by the financial supervision department, and insurance companies have no autonomy in this regard.
2. Bank credit indirect financing and plan management mode.
As long as the credit plan and interest rate control system still exist, social financing will inevitably be mainly indirect bank credit financing controlled by the government, and the capital supply of economic activities will mainly be carried out through banks. Accordingly, social idle funds will be concentrated in banks as much as possible, including a large number of insurance reserves collected by insurance companies; Otherwise, the framework of planning management is incomplete and inefficient. However, insurance reserves and bank credit funds are different after all, and the nature of liabilities is also different, so the requirements for the insurance industry should be stricter. The traditional insurance industry in China operates on the basis of this policy and reality.
3. In the environment of imperfect securities market mechanism, small scale, strong speculation and low quality of investment participants, insurance companies should not participate in the securities market too much.
For example, the national debt and financial debt market permitted by law is single in variety, market segmentation and low in liquidity, which is not conducive to a large number of convenient access and holding by insurance companies. You know, the insurance industry in the United States and Japan can use bond investment as the main channel for the use of funds, because there are hundreds or thousands of types of bonds, the market is rich in derivatives, and the trading market mechanism is sound, at least not as speculative as in China at present. Rich variety structure and highly liquid market base enable insurance companies to make full use of portfolio investment methods and technologies to arrange the use of funds, and at the same time obtain the benefits needed to support business development.
It can be said that at present, the correlation between China's insurance companies and the securities market is weak, far from being an institutional investor that affects the securities market. The securities market has not become the profit source of insurance institutions and has not yet played a positive role in promoting the development of the insurance industry. But this situation can only be said to be temporary, not a long-term phenomenon, because both markets are in the process of rapid development, and the relationship between them will inevitably change frequently with the development of various places and the marketization of the whole national economy, and the correlation will be strengthened day by day, which will inevitably tend to the general laws shown by mature market economy countries.
Four, how to look at the future relationship between the insurance industry and the securities market in China?
1. Capital appreciation is the core dynamic mechanism of commercial insurance management and the key factor to determine the competitiveness of insurance companies.
From the microscopic point of view, the competitiveness and vitality of insurance companies depend on their solvency, which depends on the profitability and profit level of the company. If an insurance company is unprofitable or loses money for a long time, it will not have a high solvency, and then it will be eliminated by the market, which is beyond the reach of commercial insurance institutions, because profitability is the most fundamental factor that distinguishes commercial insurance from social security and maintains its survival and development. The profitability and profitability of modern insurance companies no longer depend entirely on their direct underwriting business, but more on their investment ability and investment income level, and investment in the securities market is the most suitable for the use of insurance assets, because portfolio investment in the securities market is not only liquid, but also less risky than private bank deposits in the western market economy, and the income is naturally higher than bank deposit certificates. Therefore, the participation of insurance institutions in the securities market is also the general trend of China in the future. This is not only the need of the development of the insurance industry itself, but also the need of optimizing the investor structure of the securities market, reducing speculation and promoting the healthy development of the securities market. Its significance is positive for both the insurance market and the securities market.
From a macro point of view, insurance companies, as a kind of enterprises that underwrite the risks of disasters and accidents, can only play a decentralized role in the risks caused by subjective or objective factors, that is, disperse these risks from one person or a few people to a wider range of social members, thus enhancing their ability to resist risks and maintaining economic and social stability. However, these risks can not be eliminated or avoided by commercial insurance alone, because they exist objectively to some extent for human beings. However, even if this risk dispersion mechanism is sound and effective, it depends on the ability of insurance companies as intermediary organizations to integrate and disperse risks, and this ability must be assisted by third parties outside the insurance industry itself, that is, through the investment of insurance intermediaries, the insurance industry will be combined with market forces outside the insurance market, and the power from other markets (that is, income) will be used to strengthen the ability of insurance intermediaries to integrate and disperse risks. Otherwise, regardless of the structure of the insurance industry itself, there is no investment to introduce other markets and social forces, and the risk dispersion mechanism of the insurance industry is also weak, that is, from a macro perspective, insurance management also needs to rely on investment.
The so-called investment is a process of constantly pursuing capital appreciation. Therefore, capital appreciation is a core dynamic mechanism of the insurance industry, which requires China's insurance industry to establish such a consciousness with the pursuit of capital appreciation as the core, and can no longer unilaterally pursue the extensive operation of premium income growth.
Capital increase operation means that the insurance industry will be widely involved in the securities market in the future, which is also a subject that cannot be ignored in China's securities industry, that is, the securities industry needs to study the insurance market for its own development. In this way, the correlation between the two will inevitably increase, but first of all, we should vigorously develop China's securities market, constantly improve its basic operating mechanism, and at least make it a market suitable for insurance institutions to participate.
2. On the basis of existing laws and regulations, we should first develop and improve the operating mechanism of China bond market, especially the national debt and financial bond market.
In order to make China insurance companies play an active role in the securities market, and make the latter become the main source of profits for the former, we can only proceed from the reality of China, step by step. And at present, the legal profession has stipulated that the use of funds by insurance companies is limited to national debt and financial bonds. Therefore, first, while enriching the variety of national debt, we should continue to adhere to the marketization of the issuance mechanism of national debt, that is, increase the variety of national debt according to the actual situation, so that investors have sufficient choice, and also allow portfolio investors such as insurance companies to have optional tools for their asset portfolios. In particular, it is necessary to issue long-term interest-bearing bonds with regular interest payments 10 years or more for investors like insurance companies, so as to truly make them obtain portfolio income; Second, treasury bonds with low interest rates and no circulation should no longer be distributed to insurance companies; Third, while increasing the circulation of negotiable government bonds, open the organizational structure of the government bond market, which is mainly based on over-the-counter transactions and supplemented by on-site transactions, and increase the stock of assets and instruments in the secondary market to meet the large transaction needs of institutional investors including insurance companies; The fourth is to develop orderly and powerful bond derivatives to meet the portfolio investment needs of institutional investors; Fifth, as far as a large number of financial bonds issued in China at this stage are concerned, they must be converted into market-oriented issuance and allowed to enter the secondary market for transactions, so as to form a unified market where the primary market and the secondary market are connected with each other and become the preferred investment field for institutional investors. Only by putting these measures into practice can we reduce the share of bank deposits and increase the bond investment of insurance companies. The policy goal should be to reduce the proportion of bank deposits to below 30% and bond investment to nearly 50%, so as to form a benign capital utilization structure of insurance companies with strong investment ability and support the development of the insurance industry.
3. The most fundamental thing is to gradually cancel the credit plan management mode, weaken the influence of this guiding ideology, and gradually relax the interest rate management in the process of accelerating the establishment and improvement of the market economic system.
Because only by weakening the credit plan can we lift the restriction that insurance company funds are mainly used for bank deposits; Only when the credit plan is weakened can the interest rate be marketized, which is the premise of the real development and sound mechanism of the securities capital market, and the insurance companies can invest heavily in the securities market and the securities market can play its due role in the insurance industry. Moreover, the interest rate marketization mechanism itself is also conducive to insurance companies, especially life insurance companies, to set interest rates reasonably and correctly, manage their respective asset operations, and enhance their investment ability to support timely and full claims and compensation.
4. When the mechanism of the stock market is more and more perfect, speculation is confined to appropriate areas, and at least the laws and regulations on the stock market are really sound and can play a role, the restrictions on insurance companies' participation in stock market investment should be liberalized.
As an important part of the capital market, the stock market is an important investment field for institutional investors. Of course, it is necessary to ensure that insurance companies mainly invest in the medium and long term, rather than short-term speculation. This is also an inevitable trend in the future. Otherwise, the long-term restrictions on the use of funds by insurance companies will be too great, and the pressure from profits and competition will force them to make private irregular investments, but the negative impact caused by this behavior is probably much greater than relaxing restrictions.
In addition, restrictions on insurance companies' participation in real estate investment and mortgage loans should be relaxed.
5. Insurance companies should pay more attention to the cultivation of high-quality professional investment teams while cultivating marketing teams, developing agents and brokers.
A group of professionals who know the securities market, especially the investment theory and practice in market portfolio, and are familiar with real estate investment and mortgage loan business are not only the relationship between insurance companies' participation in the securities market and other investments, but also the premise of relaxing the restrictions on the use of funds by insurance companies according to law, and the primary factor for insurance companies to implement capital appreciation as the core mechanism and ensure long-term competitive advantage to maintain long-term development. At present, the insurance industry in China has not done enough in this respect, or even is almost blank. Therefore, the training and team of talents in this area.
Yuan Dong, National Debt Department of Ministry of Finance
Shanghai securities news.
December 5, 1997
Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.