Research On Securitization Of The Catastrophe Insurance Risk

As a risk disperse mechanism that internationally complement of catastrophe risk insurance and reinsurance in recent decades, catastrophe insurance risk securitization has already shown more and more importance. In the essence, catastrophe insurance risk securitization disperses the catastrophe risk to the capital market, making use of the strong capacity of capital market to supplement insurance capacity of catastrophe risk. China is a country of natural disasters, and so far it hasn’t built up a effective compensation mechanism of catastrophe risk loss. The use of government financial relief way cannot provide adequate compensation funds for post-disaster to rebuild their home. And the increasingly development of catastrophe insurance risk securitization in the international market provides us a possible alternative. The purpose of this essay is to set flood disaster bonds as an example of how catastrophe bonds raising disasters compensation funds. This paper first introduces the research achievements and status of the catastrophe insurance securitization home and abroad. On the summary of the insurance risk securitization, based on the supply and demand from economics angle, discusses the insurance risk securitization economic effect. And obtained the beneficial experience for our country’s catastrophe insurance risk securitization development from the foreign insurance risk securitization development status and experience.At the same time, this paper discusses the necessity of development of flood disaster insurance and securitization in our country. The paper selects the1990-2009year of zhejiang, fujian and Jiangxi province flood disaster loss data and occurrence frequency, using non-life insurance actuarial theory, trying to fit flood disaster loss distribution. Based on the CAPM model flood catastrophe bond pricing, it tries to provide reference for early launch flood disaster bonds in our country.