Catastrophe Insurance Risk Diversification And Product Pricing In China

As the economic development, the world is in a rising channel today. Because increasingly efficient use of resources, capacity per capita production is rising and the value of the assets is appreciation in this period of great development. In this case, disaster caused by catastrophe led to the loss of assets will be more and more. From the view of the last three decades, the catastrophe showing destructive enhanced trend. When catastrophe occurs, people live in the affected areas fall into collapse. Our existing relief system can only meet their immediate needs, does not fundamentally affected people to obtain a measure of protection. Therefore, how to design a set of catastrophe risk dispersion mechanism for catastrophe insurance system in China is of great significance.China has become one of the world’s largest economies, compared to the constant improvement of the financial markets, the insurance industry especially the development of catastrophe insurance is limping. Whenever the catastrophe occurred, our entire country is mired overwhelmed relief, although certain standardized procedure for such a system, but each time the relief is very hasty. Our insurance companies before in catastrophe are powerlessness, catastrophic loss insurance payments accounted for less than3%, so how to create an effective dispersion mechanism of catastrophe insurance problems need to be solved.In this paper, the United States, Japan, Britain and other countries are more developed catastrophe system analysis, summed up the effective spread catastrophic risk in several ways:the government, insurance companies and reinsurance companies, capital markets. Several ways realistic analysis, that the government should play a leading role in the catastrophe dispersion. But should advance prevention into the disaster led to the establishment of a catastrophe insurance fund, through the establishment of catastrophe insurance fund, pooled funds to cope with the uncertainty of catastrophe events. For insurance companies and reinsurance companies, participate in the system is more important. Through participation, which can sum up the experience and find the opportunity to become the backbone of the commitment to the future of catastrophe risk? Degree of openness of China’s capital market is not very high. This article discusses only the catastrophe bonds, discusses the catastrophe bond issuance process, catastrophe bonds provide an opportunity for risk appetite in the market, investors according to investment capital exposure and whether the trigger event occurs corresponding revenue.The government, insurance companies and reinsurance companies, and the capital markets are not yet mature enough to be able to independently assume catastrophe risk. Even in the United States. Japan. Britain and other developed countries, not just rely on one own strength. Therefore, the method used in this paper is layered reinsures mode. Catastrophe insurance fund set up by the government support to undertake a certain amount of compensation within a certain range. Beyond the limit of the first layer points, insurance companies and reinsurance companies undertake the amount of a certain range. Kxcess the second layer, divided into the capital market. When faced with a large catastrophe losses exceed the amount of divided into limited liability, the government or the policyholders will bear. In this paper, the commitment amount divided into conservative estimate of line with the actual situation, which will be with strong operational.In this paper, followed catastrophe risk diversification mechanism design, we discussed the feasibility of this catastrophe system. We calculated the price of this design insurance product in line with the actual situation. From a certain extent, demonstrated the feasibility of the reinsurance mode in this mode, which is able to guarantee the solvency and stability of underwriting main, also enable the affected people to get effective protection.