A Study Of The Guarantee Insurance Under The Depression Period

Guarantee insurance is emerging and developing with the universalization of the commercial credit, guarantee insurance originated in the United States, but in our country are just beginning, a new insurance. Therefore, due to the immaturity of the development that the guarantee insurance in our country still have many problems, such as there are two divergent points of view in the concepts and the applicable laws of guarantee insurance. The emergence of guarantee insurance can reduce financial risk of bank loans, but in the depression era, in addition to banks and other financial sectors at risk, the guarantee insurance also at risk. In a growth or short-term recession of economic, the loss of guarantee insurance is only minor. However, in a severe economic downturn or recession, the loss of guarantee insurance is huge, and face with the high number of cases, a huge amount of claims o, reach catastrophic dimensions. Therefore, it is necessary to adopt a number of models and other methods to predict the probability of economic depression and its severity, thus effectively reducing the risk of the guarantee insurance. And to further analysis to explore the problems of China's guarantee insurance and put forward a number of effective countermeasures. This paper is divided into six chapters.The first chapter is the Introduction. Firstly, it analysis the background to the guarantee insurance, and the association of insurance claims and economic cycle.Secondly, we overview about the research of guarantee insurance and the Markov regime switching model at home and abroad, which has laid a theoretical basis for this paper. Finally we further illustrate the ideas and deficiencies and innovation of this article.The second chapter describes the relevant theories of the guarantee insurance. Firstly, it introduces the origin and the development of guarantee insurance in China. Secondly, we elaborate the concept of guarantee insurance from abroad, then introduces the two divergent points of view about the concept of the guarantee insurance in China, I believe the guarantee insurance is insured, and give a definition of it. Then we analyze the difference between the guarantee insurance, surety bonds and credit insurance, which covers the nature of the guarantee insurance, at last we can conclude that guarantee insurance is a special kind of insurance. Finally we elaborate the character of guarantee insurance compare to general insurance.The third chapter researches on the empirical analysis about the forecast of depression period and claims of guarantee insurance. Firstly, it introduces the Gibbs sampling, the economic cycle and so on prior knowledge and shows the cause for us to select the gross national product data. Secondly, introduce the Hamilton model for forecasting the depression period, and apply to the annual gross national product data from 1952 to 2007 from China's "Statistical Yearbook". Then we study the empirical analysis by the R language. Thirdly, through the model checking we find that the simulation results coincide with the actual situation in China. Finally, according to the guarantee insurance claims data collected from 1998 to 2008, we analyze the guarantee insurance claims by approximate simulation of the normal distribution.The fourth chapter analyzes the problems of guarantee insurance in China. Firstly, it illustrates the necessary of developing guarantee insurance in China In the context of the economic crisis. Then based on transaction costs, we point out the problems of guarantee insurance in China from the institutional and technical, and analyze the root causes. Under the current circumstances, the legal system of guarantee insurance in China is imperfect, social credit is insufficient, lack of effective credit information system, China's economic development too much emphasis on the building of material civilization lead to the spiritual civilization construction is shortage relatively, the corporate culture of risk concept is shortage within enterprise and so on, all these factors cause a lack of guarantee insurance system. And because the development time of the guarantee insurance in China is short, he lag of rates determination technology, credit rating technology, risk prevention technology and so on lead to a lack of technologies of guarantee insurance.The fifth chapter studies the development trend of guarantee insurance in China and countermeasures. Firstly, it clarifies that auto loan guarantee insurance and housing credit guarantee insurance are the development trend of the guarantee insurance in China. Secondly, it describes the four reasons for our country to introduce the guarantee insurance:First, Chinese social and economic needs of all aspects of services from insurance increasing in the scope and depth; Second,there is a huge potential market for guarantee insurance; Third, the development of market will lead to uneven distribution of resources inevitably, which need guarantee insurance to minimize these risks; Fourth, the problems of guarantee insurance in our country can overcome by drawing on the mature experience of foreign countries. Finally, raise some countermeasures to specification the guarantee insurance:First, improving the legislation, using the law correctly; Second, establish a sound social credit system; Third, establish a sound internal risk management mechanisms; Forth, strengthen the economic policy of our country.The sixth chapter is the conclusions. It is the generalization of the guarantee insurance, pointing out the shortcomings of the paper and the directions of the further research. Through the theoretical and empirical analysis of guarantee insurance, it can draw conclusions as follows:first, guarantee insurance is insurance not guarantees. From the nature of guarantee insurance, it different from the surety bonds and credit insurance, so it is a kind of special insurance and should be applied to "Insurance Law" instead of "Guarantee Law." Second, Hamilton model can predict depression period of economic, so we can predict the frequency and severity of depression in China by combining the use of this model with gross national product of China. Then, we research on the claims of guarantee insurance by using the approximate simulations of normal distribution, and we conclude that the amount of insurance claims is indeed higher than normal level in depression stage, and the number of claims is large. Third, the development of guarantee insurance in China face many problems, we will analyze the reasons for these problems in aspect of from the institution and the technology. And in order to ensure the development of guarantee insurance, we propose some relevant policy:lay down relevant legal system, improve the credit system, control risks effectively and strengthen economic policy of our country, so that provide a good condition for the development of guarantee insurance and ensure the guarantee insurance will grow stronger in our country. Foreign scholars have achieved a lot on the research of guarantee insurance and have formed comparatively complete systems. But the guarantee insurance started relatively late in China, so far there were only some theory of guarantee insurance and not together with the economic cycle. In this paper, we pay more attention on the depression when the claims are the most severe. We use the Hamilton model from foreign scholars, combined with gross domestic product data of our country to predict the frequency and severity of depression period. For the first time to together the economic cycle with guarantee insurance. Provide a basis for avoiding the huge insurance claims. However, because of the limitation of the author's knowledge, the understanding of Hamilton model may be insufficient, so there may be some defects in the depth of study about guarantee insurance. In addition, the development of Guarantee Insurance in China is tortuous and lag, the collection of information and data is incomplete, so the simulation of model is not accurate enough and the conclusions may also be lacking. This also provides the future direction for further research.