Research Of Ocean Catastrophe Bond Of China

There are many catastrophes happened in China which cause great losses every year. So our government has to pay a lot to relieve the people in disaster, that cumber the development of economy; on the other hand, the commercial insurance companies which offer catastrophe insurance suffer a lot, so they are unwilling to offer such insurance anymore.Insurance risk securitization (IRS) has been an important innovation in international risk management field currently, which has also been a substitution and complementarity to traditional ways. Foreign experiences illustrate that IRS can solve catastrophic risks effectively in insurance industry. Catastrophe bond(CAT Bond),one of IRS, is a very important innovation in the international field of risk management in the last twenty years. Through the CAT Bond, risk is transferred from insurance market to capital market. Risk can break through the limit of the insurance market and be scattered in the wider capital market.Aiming at the CAT Bond, this article analyses the catastrophe securitization comprehensively, basing on the background of ocean catastrophe risk. And this part analyses the mode of CAT Bond pricing and the feasibility, using the technology of finance. The main contents are as follows:In the first part, the article sets forth the concept of CAT risk and the losses it caused, the background of CAT Bond , introduce some concepts, occurring background and developing status etc, and then, this part analyses the supply and demand of CAT insurance and its detracting mechanism.The second part introduces something about the CAT Bond, such as its intention, produce and development. Then it refers to the designing and operation of CAT Bond in foreign countries to analyze the designing, pricing and function of the CAT Bond.In the third part, according to the reality of China, the article analyzes the necessity and possibility on CAT Bond in China. This part firstly depicts the economic losses caused by ocean catastrophe in China and main compensation ways nowadays and then analyzes the importance of CAT Bond extended in China.The last part is the key part, which is about the empirical analysis. It designs ocean CAT Bond of China in a creative way. And based on the real data about economic losses caused by ocean catastrophe, this part also simulates the statistical distributing model. Under the condition, the article computes the CAT Bond launching price and its function wayThe article researches the CAT Bond systemically, using the knowledge of finance to analyze the pricing mode,and make a feasibility research of CAT Bond comprehensively. At last, the paper, taking the combination of theory and practice, makes the empirical study on the ocean catastrophe bond pricing, which will have a deepish significance on IRS development in China.