Establish Credit Rating System and Apply Back-Propagation Network for Forecasting Insurance Companies

Based on published financial data from property-liability insurance companies, the factor analysis was adopted in this paper to screen important variables to establish credit rating perspectives. In addition, the concept of normal distribution was used to establish objective and scientific credit rating model that match the conditions of property-liability insurance companies in Taiwan. Through proper categorization and evaluation standards, the complicated financial and business status of property-liability Insurance companies was expressed in a simple manner to let consumers, investors, and others understand insurance companies´ operation conditions. Also the supervisory institution could take the results as the reference index for supervisory organization systems. Furthermore, the back-propagation network (BPN) was adopted to establish predictive models for forecasting accurate rate, making the guidelines for supervisory organizations to conduct supervisory actions.