Research On Insurance Risk Securitization

Insurance risk securitization(IRS) has been an important innovation in international risk management field currently. Which has also been an substitution and complementarity to traditional methods. Foreign experiences illustrate that IRS can resolve catastrophic risk effectively in insurance industry. China is one of the countries which have suffered by natural disasters seriously, but China has still not fund reasonable catastrophic risk resolving system. Giant natural disasters caused by catastrophe bring us not only great losses, but also serious pressure on fiscal expenditure. So, the success on IRS in foreign countries can bring us a great deal of useful experiences on reference. Firstly, this paper set forth the occurring background of IRS. Then, based on the analysis of IRS operation in foreign countries, this paper expounded the feasibility about IRS in china. Secondly, The author also calculated the earthquake catastrophe bond's price based on real data in China. Finally, the author advances several constructive suggestions on IRS if carried out in China. Including in 4 chapters: Chapter 1: Including in the introduction of concepts, occurring background and developing status etc. of IRS. Chapter 2: Designing and operation of IRS in foreign countries. Based on the analysis of securitization products' designing and traits, the author studied on insurance actuary pricing of securitization products, meanwhile, ranking supervising and future of IRS. Chapter 3: According to the reality of China, the author analyzed the possibility and necessity on IRS in China. This chapter firstly depicts the economic losses caused by natural disasters in China and main compensation ways nowadays. In the following, analyzed the importance of IRS extended in China, according to the insurance system scarcity on natural disasters. Chapter 4: Empirical analysis and policies. The author designed earthquake catastrophe bond of China in a creative way. And based on the real data about economic losses caused by earthquake, the author also simulate the statistical distributing model. Under the condition that when rate obeys binomial distributing, bonds pricing theory and revenue rate of non-risk bond of China, the author computes the catastrophe bond launching price and various-rate price. Finally, the author advanced several relevant policies and suggestions. This paper realized the combination of theory and practice, foreign experience and domestic reality, especially, the empirical study on the earthquake bond pricing will have a deepish significance on IRS development in China.