Research On Electricity Charge Insurance Business Based On Loan Guarantee In Electric Power Industry

As one of the most national supported energy industry, the electric power industry becomes the most favored customer of various commercial banks. Credit asset stock holds the quite great proportion in many commercial banks. But in view of the power companies, the Electricity claims of assets increasing continuously, because of serious deficiencies in the electricity market credit system, the impact of factors such as natural disasters and the increasing use of electricity especially in metallurgy, chemical industry, coal and building materials industry, the claim of electricity industry is also growing rapidly. But some factors, such as the Investment in the power industry by nation, the consummation of the power system and the characteristics of loan by power industry and so on, caused commercial banks' credit to increase very quickly, in the meantime, the risk of loss also increased. Those issues influence the management of the commercial banks which credit the power industry. In order to deal with the risk of power credit assets and ensure that commercial banks and enterprises of electricity keep operating safely and keep developing, the Electricity Insurance Business is emerged. It is an innovate financial tool for ensure the loan for power industry provided by the commercial banks. This tool is the one of effective ways to solve the problems above.This paper starts from the perspective of loan guarantee for electric power industry, based on the cause of credit risk and the characteristics of risk exposure of claim on electric power industry. The paper will give deep analysis of the feasibility of electricity charge insurance business from perspectives of insuring condition, social welfare in economics and cost-income valuation and a brief elaboration of insurance business design. Finally, this paper will form an overall framework by explanation of risk prevention and supervision system.Being a most effective tool for risk management, insurance should be introduced to the risk management of claim on electric power industry. The co-policy holders are electricity consumers and electric power companies. Compulsory policy insurance is applied. Then it is possible to establish a risk smoothing mechanism for enterprises and organizations under market economy environment and solve the problems of asset loss in electric power industry due to enterprises' market failure and natural disasters. It has important practical significance for electric power industry's management environment improvement and financial risk reduction as to reduce its credit risk maximally.