Research On The Credit Default Swap Market Of China’s Insurance Industry Under The Background Of The COVID-19

Credit Default Swap(CDS)is an emerging credit insurance product that aims to transfer or diversify credit risk in the market.On the one hand,CDS is a new type of insurance that can be used to cover losses caused by possible defaults as agreed in the insurance contract.It can also maintain the normal operation of the whole market through its means of transferring and diversifying risks.On the other hand,the implementation of credit default swap insurance can also help increase the variety of insurance products and broaden the financing channels.It also promotes the market to establish insurance products to solve the road of financing difficulties of SMEs.Thus,it promotes the prosperous development of the insurance industry.However,as the CDS insurance market in China is still in the initial stage of development,the refinement types are not diverse,the structure is not complex,and there have been no serious credit risk defaults in practice,so this kind of insurance is not really open in the domestic market,and the speed of product implementation is relatively slow.The novel coronavirus pneumonia epidemic spreads globally in 2020.It also revolutionized the existing laws of environmental operation and human existence.Although the Chinese government,by virtue of the remarkable superiority of its socialist system,was able to calm down the epidemic briefly within our country.However,in the course of fighting the new epidemic,we realized that even strong policies could not completely counteract all the risks posed by the virus,especially the surge in credit risk due to the turbulence of the market economy.At this point,we needed extremely efficient market credit risk management to quell the huge aftershocks of the post-epidemic era.Credit guarantee insurance,led by credit default swap insurance,is sure to be the most effective and promising way to do so.There is a new opportunity for credit default swap insurance to grow.The paper first introduces the essential characteristics of credit default swap insurance products,the forms of their transactions in the market and the theoretical foundations on which they are based.It also clarifies the history of the development of credit default swap insurance,specifies its trading mechanism,and integrates the economic theories on which its market development is based.The article also analyzes its own characteristics:it is a kind of credit guarantee insurance,a new type of non-traditional insurance business,and in the context of cross-border financial business.Secondly,the article compares the historical process of the development of credit default swap insurance in China,and sorts out the obstacles and difficulties encountered in the development of the domestic decade.It also presents an outlook on the new development opportunities for credit default swap insurance in the context of the new crown pneumonia epidemic.Thirdly,the paper analyzes the market demand for credit default swaps in China’s insurance industry in the context of the epidemic through questionnaires and empirical analysis,and uses a logistic binary regression model in order to find the main factors influencing the purchase of credit default swaps insurance in the current era.Finally,the article presents some suggestions for optimizing the credit default swap market in the insurance industry in the context of the current new crown epidemic.Combining the empirical analysis of the factors influencing the market demand of CDS insurance and the problems of the market development,the article proposes specific measures through the guiding ideology,basic principles and development objectives of the 14 th Five-Year Plan,such as increasing government support,guiding enterprises to raise awareness of demand,strengthening the enthusiasm of insurance companies and strengthening the market supervision system.This could enable the stable and healthy development of our credit default swap insurance market and promote the growth of the insurance industry as a stabilizer for the operation of the Chinese market economy after the occurrence of the new crown epidemic.