Research On The Construction And Improvement Of China's Risk Transfer Mechanism

With the rapid development of our economy and society and the intense growth of the population and wealth,the losses caused by catastrophes have also been on the rise,which pose a great threat to people's lives and property.Therefore greater attention should be paid to the issue of catastrophe,especially in the construction of a socialist harmonious society.However,the responsibility is mainly taken by the government which has only a few ways to transfer the risks. Furthermore,the amount of the relief funds can only be maintained on a much lower level because of the impact of many objective factors like GDP,etc.Meanwhile,the insurance companies have long adopted restrictive underwriting policy on the insurance of catastrophe due to the tremendous risks involved.As a result,insurance only plays a minor role in terms of the catastrophe risk which leads to a much lower economic compensation.More than 95%of the losses caused by catastrophe are expected to sustain by the disaster victims which pose great difficulties to their lives and the post-disaster reconstruction.So the establishment of a sound risk transfer mechanism has become an urgent issue.First of all,this thesis analyses the insurability of the catastrophe risk based on the theory of supply and demand relation.And it also points out the root cause of the absence of catastrophe insurance,and offers remedy for that.Secondly,this thesis introduces the traditional methods involved in risk transfer mechanism, relief funds and catastrophe reinsurance,and the new approach,catastrophe risk securitizations. What's more,the advantages of the new approach have been pinpointed by comparing with the traditional ones.Then it introduces three classic modes of risk transfer mechanism,Japanese Mode,Norwegian Mode and Turkish Mode,and their implications to China's insurance industry.Based on the above analysis,this thesis concludes that the risk transfer mechanism should be built upon the integration of the government's effort and the market status,which should include all the merits of the different modes,and also offers the countermeasures.