At 14:28 on May 12, 2008, a sudden earthquake hit China's Sichuan Province Wenchuan County. The magnitude 7.8 earthquake not only caused significant casualties, but also on the local and surrounding areas of public and private property caused very serious damage. After the earthquake, the Chinese government quickly launched relief work in full rescue of the wounded at the same time, do everything we can to safeguard the people's lives. In natural disasters, the insurance companies have been quick to the disaster area donated more than 30 million yuan of money, and immediately activated the emergency plan for people in disaster areas and relief workers to provide personal protection. However, the insurance industry should play a role is to provide funds for the reconstruction of security, because in reality many of the objective conditions have forced insurance companies helpless, this problem is worthy of our reflection.
First of all recognize the need earthquake insurance is different from ordinary property insurance. From the perspective of risk classification, should belong to the earthquake catastrophe risk, not ordinary property insurance policies within the scope of protection. The same general area of housing, cars and other property insurance losses were scattered, the risk is evenly distributed, while the earthquake affected areas will cause people's property damage at the same time, the risk is concentrated. Insurance companies will not encounter many years after the Chuxian coverage, but it may have to bear huge one-time compensation for the situation. This requires insurance companies in advance stored a large number of reserve to cope with the huge future potential compensation to insurance companies in carrying out the Catastrophe Insurance will take time different from the general property insurance and capital operation of the business strategy.
We know that the catastrophe insurance needs of the Government's active participation in and play functions, and the current China's earthquake insurance is precisely the lack of strong policy support, more earthquake insurance also rely on the companies in the market operation. This situation is caused by the insured less coverage of the narrow and very limited underwriting capacity, unable to meet the needs of society. You can learn from abroad relatively mature earthquake insurance operations experience to guide the future of China's earthquake insurance market expansion and improvement to provide a reference of experience.
In the more developed insurance market in the United States, the people's awareness of earthquake insurance is not very high, in geological instability and higher insurance rates in California, only about 15 percent of households purchase earthquake insurance. Compared to earthquake insurance as a financial standing of the family expenditure in order to protect the security of property, many people more willing to believe that such a major earthquake may be a lifelong Nanyu things will not happen to them, even if the earthquake occurred, the Government will Provide financial assistance.
But this ignores the government only for people in disaster areas to provide low-interest loans to rebuild their homes and unable to pay for their housing. Will cause fundamental damage to housing in addition to the fire, only a natural disaster. As a general family and the most important assets of the housing and motor vehicles, once it is damaged by the earthquake but could not afford the cost for the restoration, then on the fight against this family is enormous. This will not only cause heavy losses to the family assets, but also to people's lives tremendous negative impact, it is necessary to the family's main asset to provide the necessary protection. To enhance public awareness on earthquake insurance, the Government must play in which the publicity, organizers and promoters of the role.
To California as an example, earthquake insurance is provided by the State Seismological Bureau, the rate for the implementation of strict supervision to ensure that companies deal with earthquake disasters have adequate solvency. California Seismological Bureau (California Earthquake Authority) first of all to the U.S. Geological Survey (United States Geological Survey) and the California Geological Survey is based on measurement data to assess earthquake risk in the district.
On this basis, the use of actuarial models, measured in a different order of magnitude of local earthquake may cause the loss, and, accordingly drawn up a different combination of earthquake insurance contracts. According to the last reference to the different factors for different regions and different real estate conditions set the corresponding rates by insurance companies under the jurisdiction of Member sales. For example, relatively loose soil zones corresponding higher rates; housing the year, foundation, structure and construction materials, and so will become the reference rate factors. The development of the standard rate is not fixed, will be based on different periods corresponding to different geological and crustal movements, as well as historical data, the rate of implementation of a certain degree of floating.
California is still the earthquake insurance as an example, the protection of their coverage and have done a certain degree of restriction. First of all, provide compensation for the protection of housing must be used for residential purposes, all other commercial, industrial space is not within the scope of protection. If the second set of family-owned housing, in a separate purchase of a separate earthquake policy on the basis of the enjoyment of insurance coverage. Secondly, one can choose for the home office supplies, housing and living expenses to provide the necessary protection. Household items include: furniture, electrical appliances and clothing, the choice of general insurance rates range from 5 to 1,000 U.S. dollars ranging from a maximum 100,000 U.S. dollars. For the protection of housing, depending on the actual case may be insured, did not set an upper limit. However, all the earthquake insurance contracts are 10% or 15% of the deductible, that is, if the insured the 100,000 U.S. dollars of insurance earthquake insurance policies, the general Chuxian after more than 10,005 of the loss of some 1,000 U.S. dollars, insurance companies only Will be paid, and to be part of the insured Mianpei their shoulder.
Because insurance is the high value of housing, higher premiums for some years. Set the upper limit of personal property insurance and deductibles is intended to focus on relief funds do need to address this part of compensation for people's homes on the issue of reconstruction. California quake can be used for the payment of compensation capacity of the capital over 8 billion U.S. dollars, tremendous capacity to pay the accumulated premium income comes from, the local member companies account for payment to the Fund, loans, reinsurance and investment income, and so on. At the same time the Government through revenue from income tax in the form of earthquake insurance to provide financial support and the fund earmarked, not to subsidize the budget deficit. The premiums collected by the earthquake, management, and for bank deposits, government bonds and other secure investment channels.
Through the U.S. representative of the earthquake insurance system is not difficult to understand that the Government played a crucial role. Because earthquake insurance is catastrophic insurance and the nature of such insurance has its own by the nature of the relief will require the organization and participation in government, can improve its efficiency. Government-led catastrophe in insurers can operate on the purpose of the protection of people's interests, but also effective integration of resources and achieve financial security management and use. So in the future development of China's earthquake insurance, the urgent need to establish a government-led catastrophe risk diversification mechanisms and catastrophe insurance system. On the one hand, through policy support to foster their growth, on the other hand also through reinsurance as well as financial derivatives and other risk diversification, the ability to provide protection. So that insurance can effectively replace society to assume the responsibility of earthquake risk management, for the lives of the people to provide security and stability.
First of all recognize the need earthquake insurance is different from ordinary property insurance. From the perspective of risk classification, should belong to the earthquake catastrophe risk, not ordinary property insurance policies within the scope of protection. The same general area of housing, cars and other property insurance losses were scattered, the risk is evenly distributed, while the earthquake affected areas will cause people's property damage at the same time, the risk is concentrated. Insurance companies will not encounter many years after the Chuxian coverage, but it may have to bear huge one-time compensation for the situation. This requires insurance companies in advance stored a large number of reserve to cope with the huge future potential compensation to insurance companies in carrying out the Catastrophe Insurance will take time different from the general property insurance and capital operation of the business strategy.
We know that the catastrophe insurance needs of the Government's active participation in and play functions, and the current China's earthquake insurance is precisely the lack of strong policy support, more earthquake insurance also rely on the companies in the market operation. This situation is caused by the insured less coverage of the narrow and very limited underwriting capacity, unable to meet the needs of society. You can learn from abroad relatively mature earthquake insurance operations experience to guide the future of China's earthquake insurance market expansion and improvement to provide a reference of experience.
In the more developed insurance market in the United States, the people's awareness of earthquake insurance is not very high, in geological instability and higher insurance rates in California, only about 15 percent of households purchase earthquake insurance. Compared to earthquake insurance as a financial standing of the family expenditure in order to protect the security of property, many people more willing to believe that such a major earthquake may be a lifelong Nanyu things will not happen to them, even if the earthquake occurred, the Government will Provide financial assistance.
But this ignores the government only for people in disaster areas to provide low-interest loans to rebuild their homes and unable to pay for their housing. Will cause fundamental damage to housing in addition to the fire, only a natural disaster. As a general family and the most important assets of the housing and motor vehicles, once it is damaged by the earthquake but could not afford the cost for the restoration, then on the fight against this family is enormous. This will not only cause heavy losses to the family assets, but also to people's lives tremendous negative impact, it is necessary to the family's main asset to provide the necessary protection. To enhance public awareness on earthquake insurance, the Government must play in which the publicity, organizers and promoters of the role.
To California as an example, earthquake insurance is provided by the State Seismological Bureau, the rate for the implementation of strict supervision to ensure that companies deal with earthquake disasters have adequate solvency. California Seismological Bureau (California Earthquake Authority) first of all to the U.S. Geological Survey (United States Geological Survey) and the California Geological Survey is based on measurement data to assess earthquake risk in the district.
On this basis, the use of actuarial models, measured in a different order of magnitude of local earthquake may cause the loss, and, accordingly drawn up a different combination of earthquake insurance contracts. According to the last reference to the different factors for different regions and different real estate conditions set the corresponding rates by insurance companies under the jurisdiction of Member sales. For example, relatively loose soil zones corresponding higher rates; housing the year, foundation, structure and construction materials, and so will become the reference rate factors. The development of the standard rate is not fixed, will be based on different periods corresponding to different geological and crustal movements, as well as historical data, the rate of implementation of a certain degree of floating.
California is still the earthquake insurance as an example, the protection of their coverage and have done a certain degree of restriction. First of all, provide compensation for the protection of housing must be used for residential purposes, all other commercial, industrial space is not within the scope of protection. If the second set of family-owned housing, in a separate purchase of a separate earthquake policy on the basis of the enjoyment of insurance coverage. Secondly, one can choose for the home office supplies, housing and living expenses to provide the necessary protection. Household items include: furniture, electrical appliances and clothing, the choice of general insurance rates range from 5 to 1,000 U.S. dollars ranging from a maximum 100,000 U.S. dollars. For the protection of housing, depending on the actual case may be insured, did not set an upper limit. However, all the earthquake insurance contracts are 10% or 15% of the deductible, that is, if the insured the 100,000 U.S. dollars of insurance earthquake insurance policies, the general Chuxian after more than 10,005 of the loss of some 1,000 U.S. dollars, insurance companies only Will be paid, and to be part of the insured Mianpei their shoulder.
Because insurance is the high value of housing, higher premiums for some years. Set the upper limit of personal property insurance and deductibles is intended to focus on relief funds do need to address this part of compensation for people's homes on the issue of reconstruction. California quake can be used for the payment of compensation capacity of the capital over 8 billion U.S. dollars, tremendous capacity to pay the accumulated premium income comes from, the local member companies account for payment to the Fund, loans, reinsurance and investment income, and so on. At the same time the Government through revenue from income tax in the form of earthquake insurance to provide financial support and the fund earmarked, not to subsidize the budget deficit. The premiums collected by the earthquake, management, and for bank deposits, government bonds and other secure investment channels.
Through the U.S. representative of the earthquake insurance system is not difficult to understand that the Government played a crucial role. Because earthquake insurance is catastrophic insurance and the nature of such insurance has its own by the nature of the relief will require the organization and participation in government, can improve its efficiency. Government-led catastrophe in insurers can operate on the purpose of the protection of people's interests, but also effective integration of resources and achieve financial security management and use. So in the future development of China's earthquake insurance, the urgent need to establish a government-led catastrophe risk diversification mechanisms and catastrophe insurance system. On the one hand, through policy support to foster their growth, on the other hand also through reinsurance as well as financial derivatives and other risk diversification, the ability to provide protection. So that insurance can effectively replace society to assume the responsibility of earthquake risk management, for the lives of the people to provide security and stability.
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