Study On Insurance Management For Urban Constructions In China Based On Seismic Risk Analysis

Earthquake disasters not only have a significant influence on urban constructions, but also cause negative impacts on social and economic activities. Furthermore, the influences and impacts are becoming more and more remarkable with the rapid economic development of our country. In the relief and reconstruction of previous earthquake disasters in our country, the compensation funds were mainly provided by the government, which were not so effective and causing heavy burdens to government finance. Thus we should learn from other countries which use insurance to effectively transfer the risk. So pricing earthquake premium and premium rate reasonably, and establishing a rational earthquake insurance system are of great practical significance and can provide sound theoretical support of advancing earthquake insurance in our country. This paper systematically studies the seismic risk and insurance management of urban constructions, and researches done are as follows:(1) Earthquake risk of urban constructions is analyzed. There are two typical ways to analyze earthquake risk of urban constructions, one is traditional analysis method and the other is based on probabilistic models of earthquake loss estimation. An improvement of hazard analysis of traditional way is put forward; operating mechanism and mainly outcomes of several sophisticated probabilistic models of earthquake loss estimation are studied. The loss estimation outcomes can be used as foundations of premium and premium rate pricing.(2) A reasonable way of pricing premium and premium rate is proposed. The insurability and significance of earthquake insurance are discussed; the definition and pricing methods of premiums and the corresponding rates are put forward based on the two ways of earthquake risk analysis, the pricing method based on traditional one is improved with a case study; the pricing method is then adjusted on the basis of effect factors such as deductibles and indemnity limits, reinsurance and catastrophe bonds, time value of capital and feedback data of insurance policies, and quantitative analysis of deductibles and indemnity limits, time value of capital is conducted with a real example.(3) Risk sharing roles of earthquake reinsurance and capital market are analyzed. The category and loss sharing effects of reinsurance are studied, the pricing method of reinsurance is also introduced. The category and characteristics of alternative capitals in capital market are analyzed, and the development of capital market in recent years is introduced, meanwhile four popular pricing models of catastrophe bonds are reviewed as well.(4) The attempt of establishing our country’s earthquake insurance system is made. The limitations of government support and social relief are analyzed; the mature earthquake insurance systems in Japan, New Zealand, California, Turkey and Taiwan are introduced; a suitable earthquake insurance system for our country’s urban constructions is put forward, and the responsibilities of government, insurance companies and reinsurance companies are also analyzed.