Abstract
This paper discusses reinsurance and securitization in managing catastrophe risks. Traditional reinsurance can effectively manage small risks of minor degree of correlation and can efficiently promote the information sharing between reinsurance cedants and reinsurers. However, with the increase of potential loss and risks correlation, the efficiency of reinsurance model will become very low, and cost of funds may become nonpaying. At this time, securitization can play its role, because it can transfer the risks to larger and more extensive capital market. Finally, this paper analyzes the feasibility of China’s insurance industry to carry out catastrophe bonds.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
References
Xie SQ (2010) Retrospect and prospect to the catastrophe bonds over the past ten years. Secur Mark Her 1(8):17–22
Cummins JD, Lalonde D, Phillips RD (2004) The basis risk of index-linked catastrophic loss securities. J Financ Econ 1(71):77–111
Lane M, Mahul O (2008) Catastrophe risk pricing. In: An empirical analysis, Policy Research working paper 4765. World Bank. https://openknowledge.worldbank.org/handle/10986/6900
Froot KA (2007) Risk management, capital budgeting and capital structure policy for insurers and reinsurers. J Risk Insur 1(74):273–299
Lakdawalla D, Zanjani G (2006) Catastrophe bonds, reinsurance and the optimal collateralization of risk transfer. In: NBER working paper no. 12742. http://www.nber.org/papers/w12742
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2015 Springer-Verlag Berlin Heidelberg
About this paper
Cite this paper
Zhu, N. (2015). Reinsurance, Securitization and Catastrophe Risks in China. In: Li, M., Zhang, Q., Zhang, R., Shi, X. (eds) Proceedings of 2014 1st International Conference on Industrial Economics and Industrial Security. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-44085-8_59
Download citation
DOI: https://doi.org/10.1007/978-3-662-44085-8_59
Published:
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-662-44084-1
Online ISBN: 978-3-662-44085-8
eBook Packages: Business and EconomicsEconomics and Finance (R0)