Research On The Development Of China's Flood Disaster Catastrophe Index Bond Based On International Cooperation

Natural disasters occur frequently in China,especially during the rainy season,and the economic losses caused by flood disasters rank first in the world.The existing flood catastrophe risk dispersion is mainly concentrated in government compensation and assistance,social donations,and insurance compensation.The flood disaster catastrophe risk is a small probability,high risk event,lacking an effective actuarial basis.China's insurance market cannot afford huge economic losses caused by flood catastrophe,and the government is also facing huge financial pressure.At the same time,flood catastrophe as one of the natural disasters that threaten the world has also caused great influence to other countries and regions in the world.Countries or regions have sought effective ways to transfer the risk of flood catastrophe in the region to the international capital market.Under this situation,China can use the “One Belt,One Road” regional cooperation platform to seek an effective way to spread the risk of flood disasters,so as to alleviate the government's catastrophe financial pressure and improve China's flood catastrophe disaster prevention and relief system.Therefore,based on the international strategic cooperation of “One Belt,One Road”,this paper designs a flood-distribution index bond that is suitable for flood catastrophe in China,which can not only transfer flood catastrophe risk to capital market,but also Enhance international strategic partnerships.This paper focuses on the design of China's flood catastrophe index bonds based on international cooperation.Firstly,based on the relevant theoretical basis of flood catastrophe risk dispersion,this paper analyzes the current situation of flood catastrophe in China and the world,and proposes to use the flood catastrophe index to evaluate the simulated flood disaster under the international cooperation disaster prevention and mitigation mode of the 21 st Century Maritime Silk Road.Disaster losses,through the catastrophe index bonds to spread the risk of flood catastrophe.Then,according to the flood disaster system theory,three flood catastrophe risk factors including precipitation,average temperature and urbanization rate are selected,and the flood catastrophe data from May to August in China from 1990 to 2016 are collected and established by principal component nonlinear regression analysis.The flood disaster catastrophe index model shows that the simulation loss of flood catastrophe in China is consistent with the lognormal distribution.And further,using the capital asset pricing model to obtain three different types of flood catastrophe index bonds that meet different risk preferences,namely principal-collected bonds,principal-protected bonds and principal 50% guaranteed bonds,and The scale of disaster losses determines the different bond yields and issue prices.Finally,this paper analyzes the management organization,participants,transaction structure of flood catastrophe index bonds under the international cooperation mode of "21st Century Maritime Silk Road",and proposes policy recommendations to ensure the good operation of flood catastrophe index bonds.