Research On The Development Of Catastrophe Insurance Risk Securitization In China

Since the 1970s,natural disasters have occurred worldwide,and China is one of the countries most affected by catastrophe.Catastrophes have the characteristics of low frequency,high destructiveness and wide range of influence,and it is difficult to predict and prevent in advance.China's insurance industry is developing rapidly and the market scale is huge.However,the current catastrophe insurance market is still relatively lagging behind.The overall risk of underwriting catastrophe is small and the area coverage is not comprehensive.The catastrophe losses mainly depend on the government's financial allocation,traditional insurance.Insufficient capacity to insure,and there is an urgent need to find viable ways to disperse catastrophe risks.The typhoon disaster is a typical natural disaster faced by China.The Guangxi Zhuang Autonomous Region is located on the coast of China and suffered severe damage from typhoon.Therefore,this paper proposes to connect the insurance market with the capital market by referring to the increasingly mature catastrophe insurance risk securitization in the international market.To realize the full dispersion of catastrophe risk in the capital market,the article studies the pricing of typhoon catastrophe bonds based on the typhoon disaster loss data in Guangxi,and provides a favorable choice for catastrophe risk management.This paper introduces the theoretical development of catastrophe insurance risk securitization at home and abroad,the main methods and products of catastrophe insurance risk securitization,and analyzes the development of catastrophe insurance risk securitization market from the perspective of supply and demand of economics.The article focuses on the development of catastrophe bonds,introduces the main body,operational mechanism and binning of catastrophe bonds,and analyzes the necessity,feasibility and obstacles of developing catastrophe bonds.By selecting the loss data of typhoon disasters in Guangxi from 1985 to 2017 and fitting the distribution of typhoon disaster losses,it is concluded that the loss of typhoon disasters in Guangxi obeys the lognormal distribution,the number of losses obeys Poisson distribution,combined with CAPM model and cash flow analysis.The method determines bond yields and prices for different periods.This paper proposes that catastrophe insurance should be used as the basis for development,and the catastrophe damage compensation mechanism combining government bailout and catastrophe bonds should be adopted to actively establish the authoritative catastrophe risk assessment agency in China and construct a perfect catastrophe risk management system.