| China is an earthquake-prone nation, with the number of earthquakes in China each year accounting for about 25% of that in the world. Due to the suddenness and destructiveness, once an earthquake happened, it would often result in severe hit in economic and social aspects. Since 2004, the direct economic losses caused by earthquakes have reached 1 trillion yuan, accounting for 24% of the total losses of natural disasters; the death toll has reached as many as 70 thousand, accounting for 64% of total death toll in natural disasters. However, in the previous catastrophic losses, the compensation ratio of commercial insurance was less than 2%, far from developed countries, with the compensation ratio at 20%-40%. The financial allocation of disaster relief in China is increasing year by year, from 3.52 billion yuan in 2000 to 60.98 billion yuan in 2008, and brings great pressure to national finance.Earthquake disaster risk belongs to global catastrophe risk. In order to avoid huge impacts on national finance and people's living caused by earthquake, Japan, New Zealand, Turkey, American and Taiwan have developed distinctive earthquake insurance products in respond to the challenge of the catastrophe on the basis of the level of economic development, the capability of insurance industry, the disaster history, etc. In recent years, Chinese government attaches an increasingly great importance to earthquake insurance. The "New State Council's No.10 National Notice" encourages to explore effective protection mode of typhoon, earthquake, landslide, debris flows, floods, forest fires and other disasters according to regional risk characteristics. In 2013, China Insurance Regulatory Commission approved Shenzhen and Yunnan as the first batch of pilot areas of the catastrophe insurance in China. Shenzhen model is to protect casualties caused by earthquakes; while Yunnan Chuxiong model is for rural housing earthquake insurance, aiming to explore to establish an earthquake insurance system that government lead and business insurance company participate. Unfortunately, the Chuxiong pilot area works slowly, and has not yet officially launched.However, as the earth is entering a new round of earthquakes active period, earthquake disaster frequency, released energy and economic losses caused by the earthquake are all rising every year. The traditional insurance products and methods, due to their own limitations, have been difficult to adapt to the demand of earthquake disaster losses dispersion in the new situation. Considering the particularity and complexity of earthquake risk, many countries have carried out innovation of earthquake insurance products. The newly launched earthquake index insurance has explored a new path and provided a model for earthquake disaster losses dispersion. At present, the earthquake index insurance has been successfully applied in CCRIF and FONDEN, and Indonesia will also implement EQII in 2015. Since the Yunnan Chuxiong pilot program has been put on hold, China is considering launching the earthquake index insurance plan, and will select Dali, another state in Yunnan province, as a new pilot area. Tianjin Protects Inspect Bureau is also actively promoting the research of earthquake index insurance in Tianjin to strive for the pilot area.At present, the domestic research of index insurance is mainly on agriculture weather index insurance, while the research on earthquake index insurance is almost blank. As more and more scholars have realized the effectiveness of index insurance in dispersing earthquake disaster losses today, the emerging successful cases will provide us with experience. Earthquake index insurance has become a blind spot in academia that are ready to be explored. One of the major problems in current development of earthquake insurance that are urgently to be solved is how to design effective earthquake index insurance products, construct suitable products promotion mode, and exert the function of earthquake index insurance in earthquake disaster risk management. Therefore, this paper adopts a research method of combining the international and domestic, historical and practical, case study and positive study, and qualitative and quantitative to study index design and premiums scale of earthquake index insurance in the micro level and to discuss operational mode and promotion plans of earthquake index insurance in the macro level, hoping to provide references for development of earthquake index insurance in China and a research direction in the future. The specific research contents are as follows:Chapter One, introduction. This chapter describes the background of this research at the beginning, highlighting the significance of the research on earthquake index insurance, and then generalizes the research ideas, research contents and methods, and the main innovation points on the basis of summarizing the related literature.Chapter Two, earthquake disasters and earthquake losses. This chapter starts from the features of earthquake ground motion, summarizes the physical quantities of features of ground motion, and provides a theoretical basis for model construction and trigger mechanism design of earthquake index insurance of the fifth chapter. The analysis of characters of earthquake damage makes clear the targeted protected population in the early promotion of the earthquake index insurance, and has laid the foundation for the research in the following chapters.Chapter Three, Chinese earthquake insurance. This chapter reviews the development history of earthquake insurance and current situation of earthquake insurance pilot areas in China. It analyzes the causes of failure of China's earthquake insurance market from supply and demand, and points out the existing problems in the development of earthquake insurance in china.Chapter Four, the application of index insurance in earthquake disasters. This chapter states the causes and development of earthquake index insurance, and highlights advantages of using of index insurance to manage earthquake risk. Analysis of successful cases of foreign earthquake index insurance provides us with experience for the promotion of earthquake index insurance in China.Chapter Five, study on pricing of earthquake index insurance. The core of earthquake index insurance is the design of trigger mechanism, which involves many problems such as earthquake disaster risk zoning, "index-losses" model construction, etc. In the aspect of risk zoning, three dimensions of earthquake risk, earthquake vulnerability and risk prevention ability to evaluate earthquake risk provides the basis for index design and regional premium scale measurement of earthquake index insurance; in the aspect of index design, a quantitative relationship model of seismic physical parameters and potential losses of housing is established through the Monte Carlo simulation and the VaR method to determine the trigger value and limit value; in the aspect of premium scale, the overall premium scale is determined by BP-ANN, while the shared proportion of each level of government is decided by per capita income.Chapter Six, the mode selection of earthquake index insurance. This chapter makes a comparative study of earthquake insurance mode of typical countries and regions, providing a theoretical support for mode selection of earthquake index insurance and the boundaries of government functions in China. It discusses the selection of pilot area of earthquake index insurance from the perspective of basis risk, and provides foundations for decision-making for promotion of the earthquake index insurance.Chapter Seven, conclusions and suggestions. This chapter summarizes the full text, discusses the main conclusions of each chapter, and looks forward to future development; and on this basis, it puts forward some targeted suggestions for the development of earthquake index insurance in China. |
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