Comparative analysis of the market relationship between insurance industry and securities industry Commercial insurance fund: an important institutional investor of securities
Commercial insurance industry has become a financial intermediary that accumulates a large amount of capital in the world today because of its competitiveness and flexibility in investment and operation, and it is also an important institutional investor in the capital market. In this regard, China itself has no realistic and sophisticated experience and lessons, and can only carefully study the situation of western and emerging market countries and draw useful enlightenment from it. (I don't have to hesitate to buy a cow.)
Commercial insurance institutions will be important institutional investors in China's securities market in the future, a supporting force in the capital market, 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 of China insurance industry and capital accumulation
The insurance industry in China developed rapidly in the 199s, with an average annual increase of 25% in premium income; It is estimated that the annual premium income in 2 will reach 24 billion yuan. By 1996, China's premium rate was 1.26%, while the level of developed countries in the world was above 1%, South Korea, an emerging market country, was 11.61%, South Africa was as high as 13%, Brazil was nearly 5% and Chile was nearly 3.5%. This shows that the insurance industry in China is just beginning, which indicates that the insurance industry will concentrate more and more social capital. Profitable insurance and social endowment insurance have become important channels for capital accumulation in the world today. In 199, the total assets of life insurance companies and pension funds accounted for 97% of GDP in Britain, 75% in the United States, 78% in Singapore, 48% in Malaysia, 3% in Chile and 48% in South Korea (World Bank, 1995). Analyze the real purpose of mainstream funds and find the best profit opportunities! )
Second, commercial insurance institutions in developed countries are important institutional investors in the securities market
1. The insurance industry in the United States is increasingly close to the securities market. Not only do most of the insurance companies' reserves invest in the securities market, but also financial products with both insurance and investment functions occur in the insurance companies themselves
In p>199, the largest asset utilization of American life insurance companies was securities investment, accounting for 54%, of which bond investment accounted for 49.8% of the assets. Followed by assets used for mortgage loans, accounting for 18.9%; Assets used in cash, short-term and other monetary forms only account for 5.2%; The net investment income in that year accounted for 25.96% of its total income. In order to ensure the safety of life insurance companies' investment in the securities market, the general accounting principles 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 lower investment levels, 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, participation in derivative markets is restricted.
at the end of p>1991, American property insurance companies had nearly $6 billion in assets. Among their investment assets, federal government and institutional bonds accounted for 22%, local government bonds accounted for 36%, corporate bonds accounted for 18.4%, stocks accounted for 19.7%, and mortgage loans accounted for 1.4%. That is to say, 97.2% of the investment was used in the securities market, of which bonds accounted for 77.2%. In addition, some insurance 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 progress of Japan's financial liberalization, the relationship between Japanese insurance companies and the capital market has become increasingly close.
Under the competitive pressure of banks and securities companies to continuously develop high-profit new financial products, insurance companies have continuously broken through the original traditional restrictions and developed in the direction of "integrated financial institutions"; People's life insurance companies are allowed to lend directly to speculative enterprises, which not only guides the reform of insurance management system, but also means that the government has further relaxed the policy provisions of insurance companies' participation in the securities market, thus making the relationship between Japanese insurance industry and securitization increasingly interdependent since the late 198 s.
III. Analysis of the Relationship between Insurance Industry and Securities Market in China
Insurance institutions in China mainly use cash and deposit in banks as insurance reserves, which accounts for nearly 5%, more than 1 times higher than that in the United States, so insurance companies actually become an indirect provider of bank credit funds: investment expenditure only accounts for a little more than 1/5, far below the level of 8% in the United States. This at least reflects the following noteworthy aspects:
1. Legal restrictions.
The Insurance Law, which came into effect in October p>1995, clearly stipulates that the use of funds by insurance companies must be steady. The use of funds is limited to bank deposits, buying and selling government bonds and financial bonds, and it is not allowed to set up securities institutions or invest in enterprises. The specific proportion of funds used by insurance companies and various project funds to their total funds is uniformly stipulated by the financial supervision department, and insurance companies have no autonomy in this regard.
2. Indirect financing by bank credit and planned management mode.
As long as the credit plan and interest rate control system still exist, social financing will inevitably be dominated by 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 reserve 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. China's traditional insurance industry is operating on the basis of this policy and reality.
3. In an environment with imperfect mechanism, small scale, strong speculation and low quality of investment participants, it is not suitable for insurance companies to participate in the securities market too much.
for example, the single variety, market segmentation and low liquidity of the national debt and financial bond markets allowed by law are not conducive to the large number of convenient entry, exit and holding of insurance companies. We should know that the insurance industry in the United States and Japan can use bond investment as the main channel for capital utilization, because there are hundreds or thousands of types of bonds, rich market derivatives and sound trading market mechanism, at least not as speculative as in China at present. The rich variety structure and highly liquid market foundation enable insurance companies to make full use of portfolio investment methods and techniques to arrange capital utilization, and at the same time, obtain the income needed to support their business development.
It can be said that at present, the correlation between insurance companies in China and the securities market is weak, so it is far from being a kind of institutional investor that affects the securities market, and the securities market has not become a profit source for insurance institutions, and has not yet played a positive role in promoting the development of the insurance industry. However, this situation can only be said to be temporary, and it can't be a long-term phenomenon, because the two 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 progress of the marketization of the whole national economy, and the correlation will be strengthened day by day, and it will inevitably tend to the general regular pattern displayed by mature market economy countries.
IV. How to treat the relationship between China's insurance industry and securities market in the future
1. Capital appreciation is the core dynamic mechanism of commercial insurance management and the key factor to determine the competitiveness of an insurance company.
From the microscopic point of view, the competitiveness and vitality of an insurance company depends on its solvency first, and the solvency 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, so it is impossible to talk about 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 profit earning of modern insurance companies no longer depend entirely on their direct underwriting business, but more on their investment ability and investment income level, and the investment in the securities market is the most suitable for the application of insurance assets, because the portfolio investment in the securities market is not only liquid, but also less risky than the private bank deposits in the western market economy, and the income is naturally higher than the bank deposit certificate. 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 whether caused by subjective factors or objective reasons, that is, these risks are distributed from one person or a few people to a wider range of social members, so as to enhance their ability to resist risks and maintain economic and social stability. However, for these risks, commercial insurance alone can not be eliminated or avoided in any case, because the risks are certain for human beings. However, even if this dangerous dispersion mechanism is sound and effective, it depends on the ability of the insurance company as an intermediary organization to integrate and disperse risks, and this ability must be assisted by a third party beyond 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 market 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 also a process of constantly pursuing capital appreciation. Therefore, capital appreciation is a core dynamic mechanism of the insurance industry, which requires the insurance industry in China to establish such a consciousness that the pursuit of capital appreciation is the core, and it is no longer necessary to unilaterally pursue the extensive operation of premium income growth.
Capital appreciation operation means that the insurance industry will be involved in the securities market extensively in the future, which is also a subject that cannot be ignored for the securities industry in China, that is, the securities industry also needs to study the insurance market for its own development. In this way, the correlation between the two is bound to increase, but first of all, it is necessary to vigorously develop China's securities market and constantly improve its basic mechanism of operation, at least to make it a market suitable for insurance institutions to participate in.
2. Based on the current 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 the main source of profits for the former, we can only proceed step by step from the reality in China. Moreover, the current legal profession has stipulated that the use of funds by insurance companies is limited to national debt and financial bonds. Therefore, first, we should continue to adhere to the marketization of the issuance mechanism of government bonds while enriching the types of government bonds, that is, increase the types of government bonds according to the actual situation, so that investors have sufficient choice, and also enable portfolio investors like insurance companies to have optional tools for their asset portfolios. In particular, we should issue long-term interest-bearing bonds with regular interest payments for more than 1 years for investors like insurance companies, so that they can truly obtain portfolio income; Second, the government bonds with low interest rates and non-circulation should no longer be distributed to insurance companies; Third, while increasing the circulation of negotiable government bonds, we should open up the organizational structure of the government bond market, which is mainly based on over-the-counter transactions and supplemented by on-site transactions, so as to increase the stock of asset instruments in the secondary market and meet the needs of institutional investors including insurance companies for large-value transactions; Fourth, research and develop orderly and powerful bond derivative products to meet the needs of institutional investors' portfolio investment; Fifth, as far as the large amount 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 trading, so as to form a unified market where the primary and secondary markets are connected with each other, so as to become a preferred investment field for institutional investors. Only by putting these measures into practice can we reduce the share of bank deposits while increasing the amount of bond investment of insurance companies. The policy goal should be to reduce the share of bank deposits to below 3% and bond investment to nearly 5%, so as to form a benign fund utilization structure of insurance companies with strong investment ability to support the development of insurance industry.
3. The most fundamental thing is to gradually cancel the management mode of credit plan, 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 when the credit plan is weakened can the restriction that the insurance company's funds are mainly used in bank deposits be lifted; Only when the credit plan is weakened can there be interest rate marketization, which is the prerequisite for the real development of the securities capital market and the real sound mechanism, so that insurance companies can invest in the securities market in large quantities and the securities market can play its due role in the insurance industry. Moreover, the market-oriented interest rate mechanism itself is also beneficial for insurance companies, especially life insurance companies, to set interest rates reasonably and correctly and manage their respective asset operations well, so as to enhance their investment ability aimed at supporting timely and full claims and payments.
4. When the mechanism of the stock market is becoming more and more perfect, speculation is confined to appropriate areas, 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 relaxed.
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 the inevitable trend in the future. Otherwise, the long-term restrictions on the use of funds by insurance companies are too many and too dead, and the pressure from profit and competition will force them to make private irregular investments, but the negative impact caused by this behavior is probably much greater than relaxing the restrictions.
In addition, the restrictions on insurance companies' participation in real estate investment and mortgage loans should be relaxed.
5. Insurance companies should pay more attention to the training of high-quality professional investment teams while cultivating marketing teams and developing agents and brokers.
Having a group of professionals who know the theory and practice of securities market, especially market portfolio investment, and are familiar with real estate investment and mortgage loan business is not only the relationship between insurance companies' participation in the securities market and other investments, but also the prerequisite for legally relaxing the restrictions on the use of funds by insurance companies, and it is also the primary factor for insurance companies to implement capital appreciation as the core mechanism and ensure their long-term competitive advantage in order 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, this.
Yuan Dong, National Debt Department of the Ministry of Finance
shanghai securities news
December 5, 1997
Extended reading: How to buy insurance, which is better, and teach you how to avoid insurance.