Yang Mingsheng: Insurance industry faces four risks at present

Yang Mingsheng, vice chairman of the CIRC, said 19th that the security situation of the insurance industry is affected by various risks, and the current Chinese insurance industry faces four risks, such as mismatch of assets and liabilities, product pricing, insufficient reserve evaluation and catastrophe. Yang Mingsheng in the 2009 China Financial Summit pointed out that the insurance industry exists in the asset-liability matching risk, currently looking at the main performance in three aspects: first, the rate of return mismatch risk, if the interest rate change on the insurance company assets and liabilities of different degrees, there will be assets and liabilities mismatch, may lead to an inability of insurers to meet their solvency standards. The second is the term mismatch risk, which is due to the small scale of medium and long term tools which can be used for insurance companies ' investment in our market.　　Third, the risk of scale mismatch, with the insurance companies overseas financing and domestic insurance companies overseas business expansion, the issue of currency mismatch is now highlighted. The second is the risk of product pricing.　　He noted that since the pricing of insurance products was based on past actuarial assessments and future expectations, not only the judgment of macro factors, such as interest rate, inflation rate, exchange rate, etc., but also the evaluation of the company's micro-operation, such as the company's profit margin, investment level and so on, any evaluation error, can cause risk.　　In the area of reserve assessment, he said, the reserve assessment affects the insurance company's profit, tax and solvency status, the lack of reserves will lead to the current profit is overvalued, insurance companies may have a future cash flow of the risk of inadequacy, and thus affect the accuracy of reserve assessment of other operations. He also said that in the catastrophe, China is a catastrophe of many countries, catastrophe to prevent, the insurance business formed a great danger.　　Because catastrophe is the risk of small probability and great loss, it may affect the financial stability of the insurance company if it happens to be far more than the loss of the insurance company, and the power of the insurance company cannot make up the damage caused by the catastrophe. To defuse the risk, Yang Mingsheng pointed out that one is to vigorously promote the restructuring of the business structure, international experience has shown that the stable growth of insurance products, the impact of economic cycles relative to the school to promote business restructuring, and actively develop risk protection and long-term savings-type insurance business, is conducive to highlighting the advantages of the insurance industry, Strengthen the stability of business development and consolidate the development of the industry the second is to strengthen the asset-liability matching management to ensure that the assets and liabilities of the long period, yield and other characteristics of a reasonable match. Third, improve the corporate governance structure of insurance companies, further rationalize the principal-agent relationship, from the institutional level to prevent insider control and shareholder infringement of the interests of the behavior. Strengthening supervision and cooperation between banks, securities and insurance.