Study On The Diversification Methods Of Catastrophe Risk

Catastrophes such as nature disasters, fires, mine and air disasters happen frequently in recent years. Especially, such disasters as floods happen almost every year, which lead to heavily losses to our country'economy and people's lives and wealth. In this circumstance, catastrophe risk can not be transferred reasonably and insurance markets have not proper risk detracting mechanism. Catastrophe insurance markets have large potential, but nowadays supply and demand is far from enough. Except for depending on the government's financial funds, there arn't any more effective methods. How to detract catastrophe risk and set up reasonable catastrophe insurance system have become concerned issues for professors and managers nowadays. Although there were literatures about our country'catastrophe insurance, pricing was discussed few times. This text embarks on insurance product price, which is the most important factor to catastrophe insurance'supply and demand, and sets up pricing model of catastrophe insurance products, then analyzes the amount of reinsurance fees held by the insurers. I hope all of my work will play a part in the management of catastrophe risk.There are six chapters in this text. The first chapter is introduction, and introduces catastrophes happened in our country in recent years,and analyzes reasons of why catastrophe insurance markets'supply and demand is far from enough.The second chapter shows some concepts of catastrophe risk, including definition and confirmation of catastrophe risk, characters and sorts of catastrophe risk and some measures used in developed and developing countries. The third chapter introduces reinsurance, referring to the definition, sorts, characters, principle and functions in catastrophe risk disperse. The fourth chapter is the core of this text, in this part, theory of zero avail and CAPM are used to price catastrophe insurance products, improving conventional ways of counting risk appending fees, and making pricing more reasonable. And then exercises avail theory to confirm reinsurance'maintained fees and check up it. Although catastrophe reinsurance is a usual method to disperse catastrophe risk, in fact, reinsurance has been exposing more and more defects, so it is time to innovate catastrophe insurance.The fifth chapter explains reasons of catastrophe insurance securitization, several tools of catastrophe insurance securitization and the influence to conventional reinsurance. The sixth chapter gives some advices to develop our country's catastrophe insurance markets nowadays and gives relative solving measures to the referred problems in the first chapter about supply and demand in insurance markets.