Try To Talk About China's Earthquake Insurance Mode Selection

An earthquake is a catastrophic risk, in the event of loss is often immeasurable. After the loss, financial and social contributions to the State alone can not meet the huge reconstruction needs for capital. Insurance as an effective means of risk management should be before and after the earthquake to perform their proper function and utility, which is the insurance industry as a manifestation of social risk management function, but also the insurance industry’s own development needs. At present, China has not established a sound system of earthquake insurance, before the earthquake prevention and in dealing with post-earthquake reconstruction issues seem powerless everywhere. Meanwhile, in the end to discuss who should deal with seismic risk when the losses, China also had a long-term academic research, should be borne by the government independently, or should be passed on to commercial insurance companies, has not formed a conclusion. In this context, research and analysis suitable for China earthquake risk models becomes very necessary.Since China is still in the primary stage of socialist development, the level of economic development is limited and people’s disposable income is not that well off. Government expenditure is far from enough to cope with catastrophe such as major earthquake. The devastating natural disasters would greatly affect the stability of economic and people’s normal life. Based on the conditions mentioned above, in order to reduce the harm of natural disasters such as earthquakes, we should start from China’s actual situation and establish a earthquake insurance mode which is leading by government policy, insurance company operation as the carrier and active participation of people as an important guarantee.This paper trys to start from the necessity of earthquake insurance and proposes that the conduction of earthquake insurance is one of the necessary measures to play the role of market mechanism and to reduce government’s limited emergency financial expenditure. The conduction of earthquake insurance is also an important part in building, building China’s earthquake risk management system. Based on the comparisons betweent mature earthquake insurance modes all over the world, this paper mainly analyzes the specific operation of earthquake insurance which includes localization of function between government and insurance company, cover style and coverage as well as premium rate of earthquake insurance Earthquake insurance fund and other concrete practice experience are also mentioned. All of the theories are discussed according to our country’s actual situation.The development of earthquake insurance is late and laggard in China. We have lots of things to do no matter in theory or in practice. Theoretically, this paper analyzes the insurance market failures caused by the particularity of the earthquake and the supply and demand of earthquake insurance. Refinance and reinsurance of earthquake insurance are also mentioned. Practically, we have to determine coverage style and scope of earthquake insurance as well as the related legal norms about earthquake insurance. At the meantime, we have to face problems such as low coverage, restrictions of economic and so on. The development of earthquake insurance in China needs the participation of government, insurance company and the common people.As the main operators of earthquake insurance, the insurance company has its own advantages including marketing capability and compensation efficiency of earthquake insurance. However, a major obstacle in operating earthquake insurance is that it is impossible to assess exactly the risk of earthquake insurance. How to assess the loss caused by earthquake is not only the emphases in nowadays theoretically, but also a very important problem to the domestic insurance company. In order to measure seismic risk, this paper uses some mathematical models to calculating the maximum probable loss caused by the earthquake. These models can also provide reference for earthquake insurance reserves of insurance company as well as post-disaster subsidies of government. We can use these models to explore ruin probability of insurance company under the operation of earthquake insurance and the degree of the government involvement.In this paper, the basic concept of the earthquake, earthquake insurance leads to the definition and development of China’s earthquake insurance status and problems. Internationally, the more successful mode of earthquake insurance are earthquake-prone areas of the Japanese model, New Zealand model, the California model and the model of Taiwan, this article introduces comparative analysis of several models get some inspiration. Implementation of earthquake insurance on the subject, this paper will not hesitate to re-ink the conclusion that our policy of providing earthquake insurance should be based on the conclusions of insurance manner. Finally, in our discussion of the process of carrying out earthquake insurance should be related to the efforts of the parties, and work together.