Study On Business Model Of Residential Earthquake Insurance In China

China has the grave natural disasters in the world. There are many kinds of disasters with high frequency and wide geographic distribution, resulting in big losses.2/3 of the land area in China is under threat of flooding to varying degrees, nearly half of the cities located in earthquake zones. According to China's Ministry of Civil Affairs statistics, China's annual result of natural disasters caused direct economic losses of RMB 50 billion to 60 billion, the average daily losses are more than 100 million. In these catastrophic losses, earthquake disaster causes the most serious consequences, whether of life or the economy, the fight against all deadly. Strong earthquake is often unprepared for its sudden and enormous destructive power to the socio-economic development, human security and social stability to survive. Therefore people always call them "the first group of victims". China accounted for 7% of the world's land area, but 35% of the 7.0 earthquake happened in China during the 20th century. The world's 1.2 million people died due to the earthquake, China accounted for 59 million people, ranking first in all countries during the 20th century. On May 12th in 2008, Wenchuan Earthquake caused 87,000 people died or missing which resulted in direct economic losses amounted to 845.1 billion.Facing the great catastrophic risk and losses, it is obviously not fully fit to let government be responsible for economic compensation and post-disaster reconstruction. Earthquake Insurance as a resource reserves and the means of economic compensation, their role and effectiveness can not be ignored. Earthquake insurance makes economic compensation for property damage caused by the earthquake, reduces the losses caused by the earthquake disaster, maintains the sustainable development of the national economy, social stability, and stability of people's minds, reduces earthquake disasters, before the earthquake to prevent all played a significant role, also make a contribution to national fiscal balance and earthquake insurance and reinsurance's general reserve accumulation, with obvious social and economic benefits.Therefore, we need to establish residential earthquake insurance system urgently, through the use of insurance mechanisms and financial subsidies for premiums and earthquake insurance fund to give full play to the amplification effect of financial input to resume production quickly to meet the funding needs of life. At the same time, insurance as the risk management industry, can play a role in all aspects so as to effectively improve the whole society's risk management techniques. After insurance companies underwriting the risk, in order to reduce the possibility of disaster losses, insurance companies would put "prevent more important than lose" philosophy on the important position of management, use the insurance industry's experience and technology to provide risk management services for policy holders, and actively participate in social loss prevention work, spread knowledge of earthquake evacuation and self-help, to minimize the loss of disasters; Insurance can gather more enough customers which face the same risk, through the collection of premiums and government's financial input, establish earthquake insurance fund to passed on huge losses and carry out damage assessment of the risk management arrangement.From a theoretical perspective, many scholars have made a lot of fruitful results of theoretical studies on the catastrophic risk research. For residential earthquake insurance in China, however, comprehensive, targeted and innovative study is still relatively small in the mode choice and residential earthquake insurance fund establishment. Therefore, it is valuable in academic and practical field to develop the study of the choice of residential earthquake insurance business model and the establishment of the fund.In this paper, we use risk management and insurance theory as the basic theoretical tool and use comparative analysis, theoretical analysis, quantitative analysis and other research methods, from both theoretical and practical aspects of residential earthquake insurance in China to discuss business models. According to China's national conditions, learn from foreign countries and regions'experience of earthquake insurance models, give specific proposals on the establishment of residential earthquake insurance business model in China. The thesis is composed by 6 chapters. The main content of the thesis is arranges as follows:Chapter 1:Introduction. The chapter briefly summarized the purpose, significance, research methods and content of this research, leads to the theme of this paper-China's residential earthquake insurance business model research, and introduced domestic and foreign research and related literature to explain this article's methodology, analytical framework and theoretical innovation points.Chapter 2:An overview of residential earthquake insurance. Summarized the situation of earthquake disaster losses, point out that the characteristics of the earthquake disaster and our unique characteristics of the earthquake, explain, the concept and characteristics of earthquake insurance; Analyze the meaning and role of residential earthquake insurance:1. Share risk, provide financial compensation; 2. Reduce the financial burden, promote the building of the financial system; 3. Appease the victims, reflect state responsibility and point out the importance of earthquake insurance. From the macro and micro levels to carry out further analysis of the residential earthquake insurance, the necessity and significance:To carry out residential earthquake insurance, you can maximize the spread of seismic risk; To carry out residential earthquake insurance, it is conducive to alleviating the financial pressure; To carry out residential earthquake insurance, it will help improve the economic security of China's insurance industry capacity; To carry out residential earthquake insurance, it will help to enhance social earthquake disaster prevention capabilities; To carry out residential earthquake insurance, it is conducive to help the affected people to restore production as quickly as possible and live a stability life. So we need to establish China's residential earthquake insurance system urgently.Chapter 3:Comparison study on residential earthquake insurance in different countries and regions. First, provide an overview of residential earthquake insurance business model, take New Zealand, Japan, Taiwan and Turkey's background, specific operation and their respective characteristics for example. According to the four countries'characteristics of their business model of residential earthquake insurance, sum up some experience:Establish relevant laws and regulations are based on a particular earthquake as the background; through legislation and the establishment of specialized agencies and other forms of the earthquake insurance system, government has played a leading role in the design, planning and administration; Earthquake insurance underwriting show the features of diversification and joint-oriented; Earthquake insurance business has a wide range of risk diversification approach. Accordingly, point out that the development of residential earthquake insurance in China should learn from:Residential earthquake insurance's establishment is required to pass legislation and it can be protected and has legal basis; Government's involvement in the earthquake insurance can provide strong policy support; Provide affordable insurance products to cover basic security; Earthquake insurance must be taken to full/part of the coercive means to ensure their effectiveness; Earthquake insurance should have a wide range of risk diversification means. And we need to make efforts to develop reinsurance.Chapter 4:Current situation and problems of business model of China's residential earthquake insurance. Focuses on the development of China's residential earthquake insurance and divided it into test water phase, stagnation phase and recovery phase. Analyze the status and problems of current business model of residential earthquake insurance, Point out the problems are: Government's role is unclear; Responsibilities of absence; Relevant supporting management systems are far from satisfactory; Lack of residential earthquake insurance products; Lack of public awareness of catastrophe insurance. And analyze the reason of residential earthquake insurance business model's problem: Strength of the insurance industry as a whole is not strong enough to constrain the ability to spread the risks of catastrophe such as an earthquake; Insurance companies'technology and service level can not fully meet the business needs of earthquakes and other catastrophic insurance; Economic capacity restrictions cause dependent on government assistance and low rates of insurance. Point out that China need to establish a suitable model of residential earthquake insurance as soon as possible.Chapter 5:The premise of China's residential earthquake insurance business model's selection. This chapter gave some proposals to the selection of residential earthquake insurance business mode in China. Combined with an analysis of previous chapters, it proposed some principles of choice. Then it discussed from the mode of operation, the implementation modalities and insured methods. Finally, it gave some suggestions from the rates, responsibilities and limits and the scope of protection of product.Chapter 6:Suggestions on China's residential earthquake insurance business model. This chapter presented how to set up residential earthquake insurance business model of China and gave the general framework of implementation plan. As well as the establishment of residential earthquake insurance in China, it made some specific practical recommendations.The progress and creation of study made in this thesis are mainly reflected on two aspects:The first is the innovation of subject selecting. There are almost no detailed studies on business model for residential earthquake insurance, residential earthquake insurance fund and product design in China. This paper explored residential earthquake insurance business model for the study, made a comprehensive, systematic, more in-depth carried out for residential earthquake insurance fund as the core business model research and expanded the breadth and depth of problem analysis.Secondly, in the early stages of development of residential earthquake insurance in China, the thesis provided a comprehensive and objective evaluation on residential earthquake insurance model of abroad, which is undoubtedly has a positive meaning related to the understanding and development of residential earthquake insurance system, is conducive to the sustainable development of residential earthquake insurance.