Study On Securitization Of Catastrophic Risks In China

Under the background of the gradual increase in catastrophic risks and the loss involved, the traditional way of insurance and reinsurance have been unable to cope with the catastrophe risk which does not have the conditions can be insured traditionally.It is necessary to research and master the new risk transfer approach:catastrophe risk securitization with an international,dynamic and systematical angle of view.Catastrophe risk securitization as an innovative way is able to enlarge the scope of catastrophe insurance risk by transferring the risk from insurance market to capital market instead of limit the risks only in the insurance one.It can enhance the capacity of the insurer,improves the insurers' welfare,increases the return of investors,desalts the role of government as the last reinsurer,and ameliorates the capital structure of insurance market and capital market enormously.Promoting the systematism and maturation of the catastrophe risk securitization theory plays a significant role practically and theoretically in the development of Chinese catastrophe risk securitization,as well as it can be consultation of the innovative research in the filed of China in a certain extent.This thesis seeks to discuss the operation of catastrophe risk securitization in China based on the analysis of the related theory and practice.To start with,in the second chapter the thesis defines the meaning of catastrophe risk securitization and reviews the history and the pertinent literatures.It introduces several important catastrophe risk securitization products with more detailed description on the Cat bonds,takes the USAA hurricane bonds as a practical example,and analyzes the inherent risks in securitization in the end of this chapter.In the second place,the third chapter describes the advantages that securitization brings including its relative predominance comparing with the traditional reinsurance, the external and internal effect that securitization brings,such as the action to insurers, policyholders,and investors.It also in this part analyzes the win-win result arising from the deepening of the cooperation of insurance market and other parts of financial market.Finally,the last two chapters ponder the application of catastrophe risk securitization in China.The fourth one describes the status of Chinese catastrophe risk and analyzes the reasons why the operation of catastrophe risk securitization is baffled in China.The last one gives several policy suggestions in the aspects of market environment,technical support and regulations of securitization in China and suggests its very imperative to develop catastrophic risks securitization in China step by step.