This thesis seeks to detail and advance path-based explanations for the changing character and conduct of Chinese state sector governance at both evolving national and current leading firm level. The ruling Chinese party-state has expressed concern about how governance failings lower operational efficiency in the state sector over three decades while continuing to devise and implement different reforms in the process. However, empirical research often suggests that its gradualist or incremental approach to reform can also result in a mosaic of different transplanted governance institutions which are not necessarily fully or immediately compatible with China’s own unique context. This thesis specifically examines the transformative dynamics of China’s state sector governance system through the prism of path based theory in order to provide a more holistic and in-depth understanding of how that context and leading Chinese actors’ own conduct both exert salient influences over governance practices. It uses a mixed-method strategy at both national and firm levels to derive a deeper and more holistic understanding than any one single method alone might do. Overall it finds governance reform to be characterized by a relatively unsynchronised and challengeable process of policy making and implementation which allows for some degree of flexibility and openness. Its more detailed findings also question path dependency type explanations' emphasis upon continued institutional stability and reproduction. These findings further suggest that the actual reform is not necessarily the collective and consensual quest for ever high levels of efficiency which certain financial economists typically assume. It can also depend upon the outcome of other competing pressures between increased marketization and competition on one hand, and different demands for maintaining extant governance structures and vested interests on the other. The former are no less legitimate and, in principle, urgent concerns for both policy makers and other leading stakeholders than the latter. Embedded characteristics cannot just be reduced to efficiency-technocratic considerations for inducing different competitive performance when these neglect how redistributive an economic governance system can be, and also the essentially mediated efficacy of certain transplanted mechanisms. Much of the convergence-divergence debate regarding national economic governance systems has nevertheless been conceived in efficiency and competition terms alone. However, this thesis suggests that the promulgation and transplantation of SSG reform policies needs to take the specific country context into greater consideration if it is to be both more meaningful and effective.

The objective of this thesis is to investigate risk capital allocation methods in detail for both non-life and life insurance business. In non-life insurance business loss models are generally linear with respect to losses of business-lines. However, in life insurance loss models are not generally a linear function of factor risks, i.e. the interest-rate factor, mortality rate factor, etc. In the first part of the thesis, we present the existing allocation methods and discuss their advantages and disadvantages. In a comprehensive simulation study we examine the allocations sensitivity to different allocation methods, different risk measures and different risk models in a non-life insurance business. We also show the possible usage of the Euclidean distance measure and rank correlation coefficients for the comparison of allocation methods. In the second part, we investigate the factor risk contribution theory and examine its application under a life annuity business. We provide two approximations that enable us to apply risk capital allocation methods directly to annuity values in order to measure factor risk contributions. We examine factor risk contributions for annuities with different terms to maturity and the annuities payable at different times in future. We also analyse the factor risk contributions under the extreme scenarios for the factor risks.

The determinants that affect the financial performance of an insurance company are complicated due to the intangible nature of insurance products and the lack of transparency in the market. Consequently, the financial performance of insurance companies is important to various stakeholders such as policyholders, insurance intermediaries and policymakers. This study aims to investigate the determinants of financial performance of insurance companies based on their financial strength rating performance. The empirical data are drawn from A.M. Best Insurance Report Online: Non- US Database. The sample consists of 57 insurers in the United Kingdom over the period of 2006 to 2010. The analyses include eight firm-specific variables, which are leverage, profitability, liquidity, size, reinsurance, growth, type of business and organisational form. Rating transition matrices and regression models are employed in this study. Rating transition analysis demonstrates a significant degree of rating changes, as reflected in the rating fluctuations. Based on the empirical results, this study establishes that profitability, liquidity, size and organisational form are statistically significant determinants of financial performance of insurance companies in the United Kingdom. This study recommends an alternative to measure the size of an insurance company, which is based on the gross premium written. In addition, this study provides insights into the effects of the global financial crisis on the financial performance of the insurance companies.