Finance and investment

Risks and benefits of a seesaw: insurance, investments and mortgages

  It is well known that modern insurance industry, protection and investment by insurers to two wheels, driving insurance companies the pace, both of them are indispensable. United States life insurance industry version 2011 Statistical Yearbook shows that in 2010, United States $ 863 billion in revenue in the life insurance industry, underwriting income total income 66%, 25% investment income total revenue, other income 9%. 2010 United States life insurance net investment income was $ 202 billion, with bond yields $ 146 billion, stock investment return $ 25 billion, revenue $ 20 billion of mortgage loans, the three investment income amounted to $ 191 billion, accounting for 95% of the total return on investment. 2010 United States investment rates of return on total assets of the life insurance industry is 4.3%.
United States life insurance data confirms at least the following four things: first, about insurance companies in developed countries rely mainly on subsidies an underwriting loss of return on investment that is not true, insurers can't make money hopes on investing. Insurers should play to their strengths and advantages, from the management cost savings efforts, develop more competitive products in the market, offering service is different from the company to form their core competitiveness in order to reap more profits in the underwriting market.
Second, already had more than 10 investment channels for Chinese insurers, the liberalisation of investment channels should not become the focus of investment management of the insurance industry. Judging from the experience of developed countries, even to the investment channels for insurance companies let go of more, truly can bring a return on investment but also to insurance companies is that several, use of the far more important than opening new investment channels.
comparison, is by far the most important investment management of the insurance system, liberalized investment insurance company which has been bound hand and foot, and give insurance companies more options. Like, should allows insurance company borrowed securities company and fund company of power for investment, insurance company can selected several home securities company or fund company for delegate investment, then implemented strictly of last eliminated system, will a period within investment performance poor of investment institutions eliminated off, for with more right of investment management people, this practices has was Social Security Fund Council and Enterprise annuity trustee people by widely used, its effect also is rather obviously of.
third, the insurance companies are very cautious of investing in developed countries. Although many investment channels, but due to risk concerns, insurance companies do not have to call the new channel in droves. In the field of insurance investment, United States in the life insurance industry risk and return is quite adept at playing on the seesaw of, regulators set the upper limit of the various investment channels for insurance companies and do not have much substantive significance.
, for example, United States the insurance provisions of the model law: use real estate investment ceiling is recognized by insurance companies assets 10%; ceiling on commercial real estate investments is recognised asset 2%. Of course, the model law only for insurance company investment is "exemplary", States may formulate specific provisions tailored to the State. For example, New York State insurance investment is: insurance companies of upper limit shall not exceed the total investment in real estate 25%, which shall not exceed the total income for the purpose of real estate investment 20%, single investment amount shall not exceed 2%; for Office real estate investment may not exceed the total amount of 10%, the individual shall not exceed 2%, outside of New York investment amount shall not exceed 0.2%.
in practice, however, United States insurance company investments in the real estate industry generally did not meet the limit of government regulators. In 1935 the United States the proportion of insurance company investments in the real estate market reached 8.5%, but most of the years are still around 3%. In the nearly 30 years since 1984, from a high of 3.56% basically continued to decline in recent years to less than 1%, so far from 1993 United States insurance industry to absolute amount of investment in the real estate industry has shown a declining trend. The end of 2010, United States life insurance companies to invest in the real estate industry's total assets were $ 27.8 billion, accounted for only 5.3112 trillion life insurance company $ 0.5% of the total investment, investment income was only a meager US $ 3.9 billion, investment ratio far below the standards of insurance regulators limit on real estate investment.
for more risky derivatives investments, unsecured debt investments, insurance companies are more cautious, many insurers on risky investments at arm's length.
the four mortgage is one of the main assets of life insurance companies. 2010 United States life insurance assets, loan amounts up to $ 317.3 billion, total assets of 9.2%, second only to stock investment, become the third largest source of profits of insurance companies. Issued insurance policy mortgage life insurance company to a policy holder especially, using the policy as collateral loans, not more than the cash value of the policy, by the policy holder about a credit to repay the principal and interest due by behavior. Its policies are not included as collateral to the banks and other financial institutions applying for loans. A policy loan is an option provided by life insurance companies to policyholders so that individual capital, enhance the attractiveness of policies. During the loan period, the applicant need not worry about the protection of insurance policy, because after the mortgage, which guarantee to remain valid until, during the period of insurance accident, the insurance company will still pay compensation pursuant to an agreement, but it awards priority for repayment.
insurance policy mortgage loans in China also have a small range of the pilot, but the lines are limited, the entire insurance industry in 2011 is only about 50 billion yuan. Insurance policy mortgage is characterized by high risk-low returns, especially in China under the background of higher loan spreads. If China's insurance policy mortgage business to compete for more space, for the utilization of insurance funds, insurance company profits higher standards, and development of the insurance industry as a whole, the Bank further integration in the insurance industry would be a lot of good.
recently, CIRC on insurance funds using intends released regulations and the specification file sought views, from assets configuration approach, and delegate investment approach, and open investment management market, and bonds investment approach, and equity and the real estate investment adjustment, and based facilities claims plans investment policy, and outside investment rules, and financing thaw coupons approach, and derivative products approach, and innovation products approach, to managed approach, and strengthening fair trade prevention interests conveying, almost everything, was industry called insurance funds using management of "combination fist".
in fact, it was the "combined", rather than the policy mortgage is established for the utilization of insurance funds a play "risk and return on the seesaw," rules of the game, because it is not based on "fist" against who in the form of, but laid down a set of rules of the game. Once you complete the consultation process this play and publish it in the form of official documents, and its impact on China's insurance funds will be far-reaching, affecting size and quality depends on the rules of the game's scientific and forward-looking.

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