"insurable Risk Conditions

一,Insurance industry provides protective service for some risks in society. The criteria it adopts to underwrite some risk is that they must obey " requisites of insurable risk". The insurable risk must be pure risk, static risk (the possibility of it can be measured by "the law of large number").Deeply fettered by the thoughts of "requisites of insurable risk", insurance industry can't acclimate itself to the rapidly changing society environment, can't adapt itself to changing consumer demands.Different scholar questions "requisites of insurable risk" and "the law of large numbers" from different angle.Based on synthesizing and inheriting historic papers, the paper express doubts about "requisites of insurable risk" from two new angles, which are "consumer sovereign" and "efficient capital market." The main points of the paper are as followed.1.From the angle of consumer sovereign, the paper suggests that "requisites of insurable risk" shouldn't be the criteria of selecting underwriting business, and that the business of insurance industry should only conform to the objective of enterprise, which is "creating customer."2.From the angle of "efficient capital market", the paper proposes that the capital market can distribute the loss of dynamic risk efficiently throughout society on the condition that market mechanism works well, and that dynamic risk is insurable, and that insurance industry can enter into the area of dynamic risk management.3.Chinese insurance industry is in the dynamic changing social environment, it should break with the pinion of traditional insurance thoughts.The objective of this paper is to make research on Chinese insurance industry's breaking with traditional wisdom and establishing new ideas of operating business, in order to respond to socio-economic and technological change.二,The paper is divided into three parts:Part one expounds that "requisites of insurable risk" fetters the thoughts of insurance industry. It is divided into three chapters. Chapter one questions the theoretical bases of "requisites of insurable risk", proposes a new way of differentiate between static risk and dynamic risk, come up with definitions of some concepts in the paper. Chapter two concerns with the negative effect of traditional insurance thoughts by study the two "insurance crisis" in USA in 20 century. The theoretical apparatus of the insurance mechanism remains static in character while most the losses it tries to redistribute have acquired a dynamic nature in a rapidly changing external environment. The outcome of this incompatible match naturally leads to insurance crisis. Chapter three expounds that "requisites of insurable risk" should not be the criteria of selecting insurance business. The customers were looked on as "good" in other industry, we must answer, "what is the objective of insurance industry" "what is its function" "what is its business".Part two talks about whether dynamic risk is insurable by analyzing the market operation of price-risk-transfer-mechanism. Traditionally, dynamic risk was not thought as insurable, however, by the research on how foreign developed market to distribute price risk (one kind of dynamic risk) throughout society, and how their investment bank and commercial bank has done business in the area of dynamic risk management, and how their insurance industry makes use of the technology of price risk management, we can deduce that "dynamic risk is insurable". Chapter four expounds why the price risk transfer mechanism was needed .Chapter five expounds how market mechanism solves the problem of redistributing price risk .By analyzing the function of the insured,trader and speculator in price risk transfer mechanism, the conditions of the mechanism operation ,and the difference between financial engineering technology and insurance actuarial technology ,we can see that the price risk transfer mechanism could realize efficiently redistributing dynamic risk by the operation of derivative security market ,and that dynamic risk i...