Financial management is insurance financial management in a narrow sense, that is, the insurer invests its remaining funds into certain channels, expecting returns and appreciation. This financing activity is a necessary means for insurance companies to operate, and it is an inherent requirement of the value-added nature of insurance funds. It can enhance insurance business capabilities, expand underwriting solvency, and provide conditions for improving the market competitiveness of insurance companies. According to its financing methods, it can be divided into direct financing and indirect financing. The former is that the insurer directly penetrates into the financial market, and the latter is to deposit funds in financial institutions and invest on their behalf.
Risk financing is an activity that insurers achieve financing by diversifying risks to coordinate the relationship between funds and risks. Mainly refers to the mutual reinsurance between insurance companies, the purpose is to maintain stable operation, not for economic benefits.
Insurance financing is the organic unity of financial financing and risk financing, which should meet the following conditions: there is a certain long-term stable capital accumulation; Sound insurance market and financial market; Good competitive environment; Open economic model; The structure of insurance mechanism is reasonable, and insurance companies can be responsible for their own profits and losses, bear their own risks and have independent right to use funds.