Whether property insurers or casualty insurers, risk management is an important point for insurance industry to guarantee healthy operation, the theoretical basis of risk management lies in the important relation between risks and capital ratio. This paper studies the relationship between capital ratio, underwriting risks and investment risks of property and casualty insurers from year 2006 to 2013 according to the use of 2SLS and 2SQR.The empirical results showed that the risk had no significant effect on the capital ratio, but the capital had significant negative effect on the underwriting risks and investment risks. It indicated that transmission mechanism of risk and capital in insurance companies had not yet fully formed, it would limit the play of solvency regulation system. Through the comparison of SLS and 2SQR, it revealed the reason why 2SLS couldnt fully explain the relationship between capital and risks. We also found that there were big differences between property insurers and casualty insurers on relation of capital ratio and risks by further study, indicating that targeted regulation would improve the effectiveness of supervision. At last, this paper proposed some suggestions on risks management and solvency regulation system.