The Study On Mechanism Design Of Catastrophe Risk Financing In China

In recent years, along with global warming, natural environmental degradation, urbanization, the rapid growth of the world population and wealth, the frequency of catastrophic events and the damage caused has emerged a clear upward trend. According to data provided by Munich Reinsurance Company show that from1980to2012, increasing the number of global catastrophe events about1.5times; recorded casualties and economic losses caused by catastrophic events constantly being refreshed.China is one of the few countries that natural disasters occur most frequently and in various types. Serious natural disasters take place almost every year, causing enormous losses. Rapid onset hazardl events can result in substantial human and economic costs. Since the beginning of2000, China has entered a new disaster-prone period, natural disasters, increased frequency of extreme weather events, especially serious natural disasters have occurred, China's social development has brought serious impact. In2012, natural disasters caused1,338people killed, about290million people were affected, and over11,090,000were resettled emergently; direct economic loss of418.55billion CNY.Facing the serious catastrophe risk and catastrophe losses, our ex-ante catastrophe risk financing mechanisms did not play its due role, the reason lies with the catastrophe risk financing has the characteristics of quasi-public goods. Facing this dilemma for the absence of catastrophe risk financing can be resolved by way of public-private partnership. Public-private partnerships is a government service or private business venture which is funded and operated through a partnership of government and one or more private sector companies. Public-private partnerships have achieved great success in the provision of public services abroad, and also accumulated some experience in the field of domestic public infrastructure, health, education, hence Public-private partnerships can played an important role in the field of catastrophe risk financing. However, there is few materials of catastrophe risk financing in domestic academic field especially from the perspective of Public-private partnerships, Therefore it is valuable in academic and practical field to develop the study of catastrophe risk financing from the perspective of public-private partnerships.But how public-private partnerships and the instruments of catastrophe risk financing linked to construct catastrophe risk financing mechanism in line with China's reality, advance in theory and practice on the road is full of obstacles. Thus, this thesis selects catastrophe risk financing as the research object, in the perspective of Public-private partnerships, using empirical analysis, normative analysis, case studies, comparative study, quantitative studies as the main methods, to explore the related issues of catastrophe risk financing from the academic and practical view. The main content of this thesis is arranged as follows:1. Introduction. In this part, the author summarizes the background and significance of this thesis, methods and main content. After reviewing the literature of catastrophe risk financing and related issues, the author proposes the innovation and lack of the study.2. The General Theoretical Analysis of Catastrophe Risk Financing Mechanisms. In summing up the main points at home and abroad, and related subjects on the basis of critical analysis, the article defines the concepts of catastrophe risk, catastrophe risk financing. review of the main theoretical basis of this study and related research using tools; use of welfare economics of catastrophe risk financing analyzed from Pareto optimality criteria, analyze the efficiency of insurance and post-financing, and on the basis of ex post efficiency perspective, discusses the role of the insurance market.3. Public-Private Partnership and Catastrophe Risk Financing. Progress from concept and practice of public-private partnerships, analyzes the driving force behind the widespread use of public-private partnerships. Combination of public goods, the basic theoretical perspectives quasi-public goods, externalities, and discusses the properties of quasi-public goods of catastrophe risk financing, and as a way of supplying the main supply and quasi-public goods catastrophe risk financing analyzed. Manner in case of catastrophe risk financing plan to run the international public-private partnership model is analyzed and summarized its various financing inspiration behind the success of the operation. 4. Market-Based Catastrophe Risk Financing. Respectively for catastrophe risk financing in insurance and capital markets were analyzed. Analysis the principle of catastrophe risk financing in insurance market, insurability of catastrophe risk, and so as a basis to discuss the main reason that lead the catastrophe insurance market failures Analysis of innovation activities on the insurance market, and pointed to the expansion of market innovation catastrophe risk insurability boundary to bring market efficiency improvements. Analysis of the principles and tools of catastrophe risk financing in capital market, comprehensive comparison of the advantages and disadvantages of various capital markets instruments. Analyzes the catastrophe bonds as major financing instrument of capital market. and the premium of catastrophe bonds were investigated to explain. Combined with the latest market data, analyze market status assessment of catastrophe risk financing, and the prospects for its future development trend.5. Catastrophe Risk Financing by Government. This part start from the general principles of economics from government intervention in the economy, combined with the uninsurability of catastrophe risk, analyzes the theoretical basis of catastrophe risk financing by government. Summarizes the main ways of financing catastrophe risk taken by the government and their characteristics, explores the U.S. flood insurance program. theoretical analysis on government relief under different expectations of the people.6. Risk Sharing Between Insurers And State-Backed Catastrophe Insurance Fund. Through the establishment of a game model between private insurance companies and State-backed Catastrophe Insurance Fund, explores the risk of government and private insurance companies to share and how can get the equilibrium of the game. Analysis of catastrophe risk financing cases.7. Financing Mechanism Design Based On Public-Private Partnership. Analyzes the shortcomings of our system of catastrophe risk financing, as well as our current funding gap faced catastrophe risk financing; followed by the establishment of inter-governmental and private insurance companies game model of public-private partnerships. Based on previous research this paper proposes to build a multi-level risk sharing basic framework of catastrophe risk financing overall objectives and the development of ideas By studying the contents of the above article on catastrophe risk financing the research has made the following progress and innovation:Respond effectively to the threat of catastrophic risks posed significant challenges facing the countries in the world. Catastrophe risk financing is an important part of risk management. Public-private partnerships in the provision of public goods and services has made remarkable achievements, this article study catastrophe risk financing based on Public-private partnerships, from a new perspective to explore solutions for catastrophe risk financing.Despite nearly five years, the relevant theory of catastrophe risk management has been highly valued in academia, because of the lower starting point for research, development is slow, there are blank areas related research and inadequacies, particularly, the role of government and commercial enterprises, such as borders, need to further strengthen and improve. In this paper, the basic theory of catastrophe risk financing and public-private partnerships departure, the system analyzes the content of specific tools, financing scale and cost efficiencies, and other aspects of the financing, the design of our catastrophe risk financing mechanisms put forward policy recommendations, rich the contents of catastrophe risk financing theory.Based on the expected utility theory framework to relax the assumption in the Theorem of risk diversification development by Borch and Samuelson, analyze the introduction of catastrophe insurance for intertemporal allocation of resource efficiency based on welfare economics. The presence of uncertainty in disaster conditions, depending on the efficiency of the standard definition, examines the role of catastrophe insurance in their respective situations.Due to positive externalities and public goods characteristics of catastrophe risk financing, For the scientific analysis of catastrophe risk financing government intervention may be negative incentives for the public, the paper discusses in detail the disaster relief catastrophe risk financing and the different forms of pre-disaster premium subsidies for different risk perception bring the public impact of differences, as well as the government's own cost control.Of course, it's a difficult issues to build an affordable, efficient and sustainable catastrophe risk financing around the world. Due to the available information, catastrophe risk financing empirical data limitations, the policy recommendations proposed financing mechanism is built on the theory discussed, empirical support is relatively weak, deeply study is needed to make the theory of catastrophe risk financing more perfect.