The Research On Insurance Risk Securitization

In 1990's, with huge impact of catastrophe risk on world insurance industry, a new kind of financial innovative instrument- insurance risk securitization has come into being. With huge gap between catastrophe loss amount of $70 billion and insurance loss amount of $18.5 billion around the world in 2003, we can infer that, at the present, there is still a consider gap between high catastrophe loss and insurance accepting capability of insurance industry, and catastrophe risks which don't join insurance still account for a considerable proportion.From another perspective, catastrophe insurance enjoys high growth potential, which is a rapidly developing market. But it needs international diversification and strong capital base. Although traditional reinsurance is still a major bearer to absorb risk, as a financial method of insurance company to deal with catastrophic risk, insurance risk securities are taking a more and more apparent role in shortening the gap between high catastrophe loss and insurance accepting capability of insurance industry. In order to compete with traditional insurance industry and convert risks, western investment banks and insurance companies are actively studying insurance risk securitization, designing and developing risk converting instruments including insurance bonds, insurance derivative products and so on. As practice shows, insurance risk securitization is a effective method to convert insurance risks through capital market.It is vital to import insurance risk securitization to China. With a large area, China is place where natural risk occurs frequently. Every year thousands of billions of economic loss is occurred due to natural risk and grave accident, while guarantee and compensation function of insurance are dwarfed by that. On the other side, as one of macroscopical economic measures, macroscopical control effect of capital market becomes more and more apparent. Pace of financial reform and opening-up quickens the process of our financial liberation, expands funding channels at home and abroad, strengthens capital liquidation. Thus capital ability and risk resisting ability are...