Author(s)

Yonglin Tan ^1,2, Hong Ran ³, Lan Yang ⁴

Affiliation(s)

¹ Institute for Chengdu-Chongqing Economic Zone Development, Chongqing Technology and Business University, Chongqing, 400067, China
² School of Economics and Management, Guangxi University of Science and Technology, Liuzhou, Guangxi, 545006, China
³ School of Electronics and IoT Engineering, Chongqing Industry Polytechnic College, Chongqing, 401120, China
⁴ School of Foreign Studies, Guangxi University of Science and Technology, Liuzhou, Guangxi, 545006, China

Corresponding Author

Lan Yang

ABSTRACT

Using the EPS database and relevant self-collated data from 120 major insurance companies in China from 2012 to 2021, the fixed effect of the panel data model was used to empirically test the impact of insurance companies' alternative investments on their profitability. The following conclusions were drawn: An increase in the proportion of non-standard alternative investment assets has improved the profitability of insurance companies, with large state-owned insurance companies benefitting most evidently, but it has reduced the capacity of local insurance companies. Before strict regulations were introduced in 2017, the increase in the proportion of non-standard alternative investments reduced the profitability of insurance companies, but after this, non-standard alternative investment business increased the profitability of these companies. The results of the grouping of local insurance companies further illustrate the negative relationship between the increase in the proportion of non-standard alternative investment business before 2017 and the profitability of local insurance companies. The results of this article provide a reference for the alternative investments and profitability of insurance companies.

KEYWORDS

Non-standard alternative investments; insurance funds; insurance company profits; risks

CITE THIS PAPER

Yonglin Tan, Hong Ran, Lan Yang, Empirical Study on Non Standard Alternative Investment and Sustainable Profitability of Insurance Companies. Financial Engineering and Risk Management (2024) Vol. 7: 143-150. DOI: http://dx.doi.org/10.23977/ferm.2024.070619.

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