With the development of insurance industry, insurance companies have accumulated a large amount of funds from premiums paid by policyholders. How to effectively invest and manage these funds has become a critical issue for insurance companies. This article will analyze some effective strategies for insurance companies to optimize their investment portfolio and strengthen risk management.
Broadening the scope of investable financial products
Insurance regulators can broaden the scope of financial products that insurance funds are allowed to invest in, such as wealth management products, asset management plans, debt-to-equity swap plans etc. This will help insurance companies diversify their investment portfolio, improve asset allocation and risk-return profile.
Enhancing due diligence and clarifying responsibilities
Insurance asset management companies should take more responsibility in conducting due diligence, making investment decisions and post-investment management when investing insurance funds into various financial products. They need to have the appropriate capabilities based on the underlying assets.
Strengthening look-through supervision
Regulators can require insurance companies to have look-through capabilities to understand the underlying assets of financial products. The risks of the underlying assets should be incorporated into investment regulations and proportion management. This reflects the true risks of insurance investments.
Setting standards for investing in asset management plans
When insurance companies invest in single asset management plans, regulators can set standards on selecting investment managers, formulating investment guidelines, and maintaining asset security. This ensures the soundness of such investments.
Improving post-investment risk management
Insurance companies should assign dedicated personnel for post-investment management, regularly monitor investment status, and take measures to control risks. Well-designed post-investment management processes are key to optimize insurance funds allocation.
By broadening investable assets, enhancing due diligence, strengthening supervision, setting investment standards and improving post-investment management, insurance regulators and companies can optimize insurance funds allocation, improve investment efficiency, and strengthen risk management.