Germany Catastrophe Insurance successful commercial operation

Germany has a mature catastrophe insurance system, insurance agencies to help disaster relief, post-disaster reconstruction play an important role. Catastrophe insurance in the form of fund raising and management modes, Germany relies mainly on commercial operation of the commercial insurance system developed to play a leading role, the low level of participation.

Commercial operation of less government involvement in

The German government on Catastrophe Insurance not mandatory requirements, mainly from private insurance companies to provide catastrophic insurance coverage, all localities and enterprises to independently choose participation. National Catastrophe Insurance does not require the standard rate or deductible, but demanded that insurance companies must use statistical data and management actuarial rates for each of the various risk assessment. Government does not have to bear the insurance risk of catastrophe insurance companies provide reinsurance protection, use of commercial operation of insurance companies in the market looking for the grantor.

In Germany, the Government has been able to let go of the catastrophe insurance management, the main benefit from the strength of the German insurance agencies, and developed insurance and reinsurance system. Germany currently a total of 647 commercial insurance companies, many of them Allianz, Munich Re insurance, and other global insurance giant.

In the catastrophe insurance, the different types of German insurance companies also pay attention to coordinate with each other, complement each other. For example, in direct insurers and reinsurers between spread the risks, share the huge amount of payment; comprehensive insurance companies and housing, automobile, and other professional division of labor with insurance companies, in different areas for catastrophic loss insurance.

Higher catastrophe losses after profit

Germany is also a disaster-prone countries. According to historical experience data, insurance companies paid the amount of general accounting for 20 percent of disaster losses around the world all belong to this high level. From the total payment, the insurance companies in Germany and Europe in recent years in the previous catastrophe is a substantial amount of payment. January 2007, "Ji Lier," after the hurricane landed south of Germany swept the European continent, to the insurance industry paid 4.6 billion euros, of which only in Germany reached 1 billion euros.

However, due to the actuarial science and management, high pay and did not result in the loss of German insurance companies and even bankruptcy. For example, in "Ji Lier" hurricanes, Munich Re insurance payment of up to 450 million euros, but was still the first quarter of the company to achieve net profit of 965 million euros, or even higher than the same period last year of 959 million euros Profit.

Catastrophe "systematic solution"

Germany to resolve catastrophic risk is the traditional solutions "catastrophe reinsurance." In the catastrophe insurance business, insurance sales, underwriting, claims and policy services directly from the insurance company to complete commitment, and then direct the insurance companies can be subject to some insurers to re-insurance companies, this will play an effective risk-sharing role. From the payment data, in all the catastrophe, the German reinsurance companies bear most of the total amount of payment of 2 / 3 around, and this proportion in the global average in half.

In addition to comprehensive insurance companies and reinsurance companies, Germany there is still a lot of professional insurance companies, in catastrophe claims also play an important role. At the same time, the Catastrophe Insurance professional and market share increasing, the major German insurance group also set up a special internal departments or affiliates, for catastrophe risk management.

Product innovation defuse risks

German insurance companies in catastrophe insurance self-financing through commercial means to raise funds and insurance claims, the company maintained by the profit is dependent on the specialized insurance actuarial. Catastrophe insurance product design need to use all types of professional and technical assessment of the disaster, a catastrophe risk analysis model, to quantify, and as the basis for the development of catastrophic risk products.

In addition to the traditional catastrophe insurance, the German insurance companies use the capital market has also been actively upgrading the insurance industry catastrophe underwriting capacity, the most important tool is one of catastrophe bonds. Its typical approach is to set up a special purpose company (SPV), with insurance companies or insurance companies enter into reinsurance contracts, also issued catastrophe bonds to investors, the interest rate generally higher than ordinary bonds 3-4 percentage points. Catastrophe bonds will be through the catastrophe risk transfer to capital market investors, the social crisis management capacity has been strengthened, insurance companies can also take the capacity to expand coverage.