A Study On Government Intervention In Catastrophe Insurance Market

China is a nation with many catastrophes, we lose more than100billion Yuan forthis reason. We know from the UN’s data that China experienced the8most criticalcatastrophes out of54.However,our nation’s insurance industry doesn’t need to facethis big problem. The reason is that our people and companies don’t have muchconscious of the insurance, and that insurance company in our country fear to face thecatastrophic risks. And the role that the market and the government should play worthour thinking and we should understand the tendency and try to build our catastrophicrisk alert system.The particularity of the catastrophe risk and the insurance market make eachinsurance company more or less in trouble dealing with catastrophe losscompensation. In these conditions, the propositions of government intervention incatastrophe insurance market are discussed by many scholars. We wonder whether thegovernment should interfere with or directly involve in the catastrophe insurancesupplies on the one hand, and what the influence is with different governmentintervention. This paper hopes to get the conclusion and to provide the basis thechoice of the ways of the government’s intervention in catastrophe insurance market.On the basis of latest research, we analyze the constraint in China’s catastropheinsurance market and determine the border of government intervention. With thereasonable and quantifiable intervention combination, we try to find the supply modeof China’s catastrophe insurance market and provide corresponding implementation.The main content of the research include:The first chapter explores the insurability of catastrophe risk, the goods attributeof catastrophe insurance, and the theory of government intervention. We collect andorganize related documents and scholars, and try to analyze the position of insurancemarket and government in catastrophe insurance market.The second chapter explores the constraints in supply and demand in catastropheinsurance market. Based on the summary and analysis of current catastrophe insurance market, we study factors that affect insurance supply and demand.The third chapter explores the market and the government respectively. First weanalyze the difficulties in managing catastrophe insurance by insurance companyalone and the state of the market failure, and try to find the possible reasons andsolutions. Then we analyze the difficulties in managing catastrophe insurance bygovernment alone and the state of the government failure, and try to find the Possiblereasons and countermeasures.The fourth chapter explores the way in which government intervenes in thecatastrophe insurance market. According to the characteristics of China’s insurancemarket and catastrophe risk, we try to build the theoretical model of governmentintervention and ensure it within the boundary. We also try to find the optimal policycombination of government and the principle of government intervention.The fifth chapter explores catastrophe insurance contracts and the supportingstrategy. We try to find out what improvement could be taken by insurance market toreduce the constraints of supply and demand of catastrophe insurance. We also try todiscuss how to use the financial derivatives to provide funds and support forcatastrophe insurance market.