scholarly journals Future investment value of China’s listed life insurance companies’ H shares from the perspective of secondary market

2020 ◽  
Vol 218 ◽  
pp. 04012
Author(s):  
Lixin Yang
Keyword(s):  
Interest Rate ◽  
Life Insurance ◽  
Insurance Industry ◽  
Secondary Market ◽  
Insurance Companies ◽  
Market Demand ◽  
Life Insurance Industry ◽  
The Future ◽  
The Impact

China’s life insurance industry has just started in the 1990s after the reform and opening up, and its development experience is obviously insufficient, and it has not gone through a very complete life insurance development cycle. No matter from the actuarial technology, the professional level of the agent, the popularization time of the agent system, or the management experience, it is far from the developed areas of the world’s life insurance industry. In addition, many professional investors are worried about the future prospects of China’s life insurance industry because of the long-term existence of a low interest rate environment. However, after reading detailed materials (research papers, books, reviews, etc.), the final conclusion of this report is different from that of other too cautious investors . This report holds that: the current situation and prospect of China’s life insurance H shares meet the conditions of Davis double-click, and the main investors in the secondary market will encounter a unique opportunity to obtain excess returns by investing in domestic insurance H shares. On the level of objective factors, we analyze from the following four aspects: (I) the potential demand for life insurance in China will continue to increase significantly in the future; (II) most of the representative life insurance companies in China have low valuations; (III) the possible style switching in China’s secondary market is conducive to the rise of blue chips such as life insurance companies; (IV) from the long-term perspective of history, the insurance index has significantly outperformed the Shanghai Composite Index, which represents the market. In terms of subjective factors, we consider them from the following four perspectives: (I) the development and problems of life insurance industry in Japan and Taiwan; (II) on the liability side, China’s life insurance industry vigorously develops new products with high business value, so as to resist the impact of low interest rates; (III) the diversification of asset allocation at the investment end of China’s life insurance industry can make the profit of life insurance industry not limited by the interest rate; (IV) the change of service quality at the supply side is conducive to the life insurance companies to tap the potential market demand in China.

Assessing the Technical Efficiency of Traditional and Corporate Agents in Indian Life Insurance Industry: Slack-based Data Envelopment Analysis Approach

2018 ◽  
Vol 21 (2) ◽  
pp. 490-506 ◽  
Author(s):  
Ankitha Shetty ◽  
Savitha Basri
Keyword(s):  
Data Envelopment Analysis ◽  
Technical Efficiency ◽  
Life Insurance ◽  
Insurance Industry ◽  
Distribution Channels ◽  
Insurance Companies ◽  
Data Envelopment ◽  
Life Insurance Industry ◽  
Significant Difference

The distribution channels play an imperative role in the life insurance industry. In India, traditional and corporate agency are contributing immensely to the profitability of the insurance companies. The challenges faced by the distributional channels such as high attrition, soaring expense ratio and sales inefficiency have created the need to probe into the efficiency aspects of the channel players. In the absence of such studies in India, this article evaluates the technical efficiency of distribution channels in life insurance industry by analysing the data collected from 12 insurance companies for the period 2012 to 2016. The efficiency scores were obtained by applying data envelopment analysis that considered two inputs (number of agents and commission expenses) and two outputs (average business premium and total policies sold). The findings reveal no significant difference in the efficiency scores of bancassurance and traditional agents. Quiet life hypothesis that market share (ratio of premium contribution to total premium) of distributional channels and their efficiency scores are negatively correlated is not supported. Moreover, the slack analysis shows excess inputs per output generated for both the channels. If the companies that scored low in efficiency do not plug the leakages regarding commission as well a number of agents, adverse performance in the long-term and consequent financial crisis are inevitable.

scholarly journals Influencing Factors of Corporate Performance of Life Insurance Companies – Evidence from China

2018 ◽  
Vol 7 (2) ◽  
pp. 219
Author(s):  
Maoguo Wu ◽  
Yanyuan Wang
Keyword(s):  
Life Insurance ◽  
Corporate Performance ◽  
Insurance Industry ◽  
Channel Structure ◽  
Policy Implications ◽  
Insurance Companies ◽  
Chinese Government ◽  
Life Insurance Industry ◽  
State Pension ◽  
The Impact

At present, the life insurance industry in China is still in the initial stage of development, which is characterized by limited scale, low penetration rate and low intensity. However, the large population base, the proliferation of middle classes, and the continuously improving socio-economic environment in China imply underlying developmental opportunities for the life insurance industry. Gaps in state pension have appeared owing to the issue of aging population, which signals that insurance companies with commercial properties may become an integral part of resident endowment. Ever since 2014, Chinese government has implemented numerous policies that are beneficial to the life insurance industry, for instance, diversifying investment channels of premiums, allowing a certain proportion of premiums in risky investments, and removing the restriction that the rate of return on common stakeholders’ equity (ROE) of participating insurance is capped at 5%. This paper constructs a panel data of 36 Chinese life insurance companies from 2010 to 2014. A serial of preliminary tests are taken in order to avoid spurious regression. By dint of the fixed effect model and panel threshold model, the paper analyzes the relation between operation-related factors and the corporate performance of life insurance companies. According to empirical findings, bancassurance income rate, professional insurance agency income rate, participating insurance income rate, group insurance income rate, company scale and solvency adequacy ratio are negatively correlated with corporate performance. When life insurance companies are associated with banks in capitals, bancassurance income rate positively influences corporate performance. The paper also investigates the impact of specific marketing channel structure and product structure on corporate performance. Policy implications are proposed accordingly.

Auswirkungen der anhaltenden Niedrigzinsen auf das Versicherungswesen

2015 ◽  
Vol 64 (2) ◽  
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Life Insurance ◽  
Insurance Industry ◽  
Life Insurers ◽  
Life Insurance Industry ◽  
Low Interest Rates ◽  
Rate Environment ◽  
German Life

AbstractHelmut Gründl discusses in his paper the effects of the present low interest rate environment on the German life insurance industry. By referring to a recent study of the “International Center for Insurance Regulation”, he assesses insolvency probabilities for life insurers with different capital endowments under different interest rate scenarios. Based on that, he discusses measures of insurance regulation that try to cope with the imminent problems of the life insurance industry. Finally, he has a look at product developments and investment strategies of life insurers in the presence of low interest rates. Hereby, he argues, that life insurance products with lower investment guarantees that are granted for a shorter period of time are regarded as the best remedy to avoid low interest rate problems in the future. Such product development also allows for a more risky investment policy of life insurers that can make life and annuity products more attractive.Rolf Ketzler und Peter Schwark explicate that the very accommodative monetary policy of the ECB and the related extremely low interest rates are involved with major challenges for the German insurance sector, in particular for life insurers. As long-term investors, insurers are not only affected in their capital investment strategy, but also by different households’ retirement saving patterns in response to the low interest rate environment. Several significant steps have already been taken in order to ensure the long-term viability of life insurance. These include changes in the product portfolio as well as new approaches in the investment strategy. In addition, new regulatory requirements have been established to strengthen the risk bearing capacity of life insurers. Given the substantial risks of low interest rates, from an economic point of view the question concerning an appropriate exit from the low interest rate environment needs more attention in the public debate. They argue that in this context, further progress regarding the economic reform policies in the euro zone is still necessary as a condition for the ECB to normalize its monetary policy as soon as possible.Focusing the perspective of German life insurance industry, the article of Heinrich Schradin starts with a brief description and discussion of the financial impact of the persistently low interest rate environment. Based on an empirical data set of German life insurers, the author illustrates actual limitations to generate sufficient investment income for to meet the given specific financial guarantees. Moreover, the core problem, caused by the use of volatile timing-related interest rates for to evaluate long-term cash flows, becomes obvious. The currently observed regulatory interventions are trying to overcome the existential consequences of the so-called fair value measurement. In consequence, the author derives four central theses:1. Life insurance in Germany suffers from insufficient capital adequacy.2. Persistent low interest rates threaten the fulfillment of financial guaranty commitments of German life insurers.3. The generally accepted principals of economic evaluation do not satisfy to the traditional business model of German life insurers.4. Under a business perspective, the development of new life insurance products is inevitable.

scholarly journals Internal branding with corporate ethical values and corporate social responsibility: The case of the life insurance industry in Taiwan

2015 ◽  
Vol 46 (1) ◽  
pp. 47-55 ◽  
Author(s):  
C-S. Lai ◽  
K-T. Hsu
Keyword(s):  
Life Insurance ◽  
Insurance Industry ◽  
Knowledge Dissemination ◽  
Insurance Companies ◽  
Ethical Values ◽  
Internal Branding ◽  
Corporate Ethical Values ◽  
Life Insurance Industry ◽  
Corporate Social ◽  
The Impact

The purpose of this study is to identify the extent to which corporate ethical values and employee-oriented CSR can be employed as business levers of internal branding for the life insurance industry. Our results indicate that the impact ofcorporate ethical values on internal branding benefits is fully mediated by knowledge dissemination, and that the impact of employee-based CSR on internal branding benefits is partially mediated by knowledge dissemination. Therefore, forlife insurance companies, employee-oriented CSR can be considered an independent lever of internal branding and can be conducted without other auxiliary initiatives to induce internal branding benefits.

The U.K. With-Profits Life Insurance Industry: A Market Analysis

2009 ◽  
Vol 15 (3) ◽  
pp. 747-777
Author(s):  
C. D. O'Brien
Keyword(s):  
Life Insurance ◽  
Economies Of Scale ◽  
Lower Cost ◽  
Insurance Industry ◽  
Significant Degree ◽  
Potential Effect ◽  
Market Analysis ◽  
Life Insurers ◽  
Life Insurance Industry ◽  
The Impact

ABSTRACTThis paper reviews the market structure of the U.K. with-profits life insurance market and the potential effect on how life insurers operate. We consider the competitiveness of the market, quantifying the increase in the degree of concentration since 2000, and establishing that inherited estates may offer some protection from competition for incumbent firms. However, there is a significant degree of mobility in market positions of leading firms. Analysis of costs indicates some large differences between firms, with larger firms experiencing lower cost ratios, indicative of economies of scale. There are some marked differences in insurers' prices, the data showing that charges tend to be lower on unit-linked than on with-profits policies. The paper suggests that while there are potential concerns about how the market operates for consumers, the impact is limited by the dramatic reduction in new with-profits business.

Determinants of Derivative Usage in the Life and General Insurance Industry: The Australian Evidence

2003 ◽  
Vol 06 (04) ◽  
pp. 405-431 ◽  
Author(s):  
Marc De Ceuster ◽  
Liam Flanagan ◽  
Allan Hodgson ◽  
Mohammad I. Tahir
Keyword(s):  
Life Insurance ◽  
Insurance Industry ◽  
Cost Effective ◽  
Insurance Companies ◽  
Long Tail ◽  
Life Insurers ◽  
Market Risks ◽  
Life Insurance Industry ◽  
General Insurance ◽  
Standard Operating

Core business and financial market risks are not easily reduced by standard operating procedures in insurance companies. Derivatives theoretically provide a cost effective vehicle to hedge these risks. This paper provides an empirical analysis of the determinants of derivative usage as well as the extent of derivative usage in the Australian insurance industry in both life and general insurance companies for the period 1997–1999. Empirical results for the Australian life insurance industry in general confirm the findings of UK and US based research. However, the Australian general insurance industry does not appear to follow the conclusions of previous literature. Our results indicate that for life insurers, the determinants of derivative usage were size, leverage and reinsurance. For the general insurance industry the determinants were size and the extent of long tail lines of business written. As regards the determinants of the extent of derivative usage, these were size and asset-liability duration mismatches for life insurers. For the general insurance industry the determinants of the extent of derivative usage were size, the extent of long tail lines of business written, and the reporting year.

A Note on the Asset-Specific Nature of Life Insurance Firms

1997 ◽  
Vol 8 (3) ◽  
pp. 167-176
Author(s):  
Mike Adams
Keyword(s):  
Life Insurance ◽  
Transaction Cost Economics ◽  
Insurance Industry ◽  
Asset Specificity ◽  
Specific Nature ◽  
Life Insurance Industry ◽  
Long Duration ◽  
Insurance Firms ◽  
Physical Assets

The concept of asset specificity is an important feature of the transaction-cost economics literature. This literature predicts that asset specificity – which embraces physical assets, specialist human capital and intangibles such as brands – fosters greater certainty in complicated transactions of long duration. The business of life insurance is a classical example of complex and long-term exchange between the owners and managers of the firm and its customers. This note thus examines the concept of asset specificity and considers its relevance to the life insurance industry. To stimulate further research four hypotheses are put forward.

scholarly journals The Impact of Internal Factor Analysis Summary (IFAS) and Competing Power on Performance in the Life Insurance Industry: The Mediating Role of Competitive Advantage

2018 ◽  
Author(s):  
Ratna Dewi ◽  
Amir Mahmud
Keyword(s):  
Factor Analysis ◽  
Competitive Advantage ◽  
Life Insurance ◽  
Insurance Industry ◽  
Internal Factor ◽  
Mediating Role ◽  
Life Insurance Industry ◽  
Competing Power ◽  
The Impact

This research aim to test and analyze the impact of internal factor analysis summary (IFAS) and competing power on performance in the life insurance industry in Makassar (Indonesia): The mediating role of competitive advantage. This study uses 60 employees of insurance companies at the manager level. Path analysis results provide evidence that the internal factor analysis summary (IFAS) and competitiveness significantly influence the competitive advantage and performance in the life insurance industry. The role of competitive advantage proved able to mediate the effect of internal factor analysis summary (IFAS) in improving the performance in the life insurance industry. The different conditions with competitive advantages that cannot increase the competing power against performance in the life insurance industry

scholarly journals Complaint Redressal Practices in Public and Private Insurance Companies

2019 ◽  
Vol 8 (12S2) ◽  
pp. 369-374
Keyword(s):  
Public Sector ◽  
Life Insurance ◽  
Insurance Industry ◽  
Private Insurance ◽  
Private Life ◽  
Insurance Companies ◽  
Public And Private ◽  
The Public ◽  
Life Insurance Industry ◽  
Regulations And Guidelines

The life insurance industry of India has 23 licenses -holders running their business in this sector. The Life Insurance Corporation of India (LICI), which is the only player in the public sector, the remaining area is covered by the 22 private sector companies. IRDAI has taken initiatives to provide effective grievance handling machinery to address the grievances of policyholders. Consumer dispute Redressal agency is efficient for handling complaints and easily accessible. This paper examines the regulations and guidelines framed by IRDAI for effective grievance handling and the study would provide some insights into the areas, specifically status of grievances in public and private life insurance companies (LIC, SBI, HDFC, Reliance Life and Bajaj Allianz) and the functioning of consumer dispute Redressal agencies of life insurance sectors.

Sign in / Sign up

Export Citation Format

Share Document