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Flood insurance in China: recommendations based on a comparative analysis of flood insurance in developed countries

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Abstract

Flooding is a serious natural disaster that has caused massive economic losses in China. The development of an effective flood disaster relief mechanism is of increasing significance, and some argue that flood insurance is an optimal solution. Currently, China uses post-disaster government aid as its main disaster relief policy, which is considerably less efficient than insurance. Thus, it is critical for China to establish a rational flood insurance system. As flood insurance is common among developed countries, a wealth of experience has been accumulated that can provide rich references for the construction of a Chinese flood insurance system. Hence, this paper will comparatively analyze the flood insurance systems of four representative developed countries and provide insight into the applicability of British and American insurance systems to China. Subsequently, suggestions will be made regarding the establishment of a Chinese flood insurance system, which include issuing legislation, establishing compulsory commercial insurance and securitizing flood insurance.

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Notes

  1. See The Ten Action Plans for the Prevention and Control of Water Pollution, 2015.

  2. See The Ten Action Plans for the Prevention and Control of Water Pollution, 2015.

  3. See The Law for Flood Prevention, 1997.

  4. See The Regulations for Flood Prevention, 2005.

  5. See The Notification of Opinions for Enhancing Construction and Management in Stagnated Flood Areas, 2006.

  6. See The Insurance Industry, 2006.

  7. See Long-Term Fluctuations in Thunderstorm Activity in the United States, Changnon SA, Changnon D. 2001.

  8. See Technical Report “A chronology of major events affecting the National Flood Insurance Program beginning with the year 1824 through January 2006”, FEMA, 2005.

  9. See The National Flood Insurance Act, 1968.

  10. See 42 U. S. Code Sect.~ 4001 (d)–(e) (2000) (declaring the purpose of national flood insurance), available at https://www.law.cornell.edu/uscode/text/42/4001.

  11. See The Flood Disaster Prevention Law, 1973.

  12. See U.S.Govt Accountability Office [Gao], National Flood Insurance Program: Greater Transparency and Oversight of Wind and Flood Damage Determinations are Needed 9 (2007), available at http://www.gao.gov/new.items/d0828.pdf.

  13. See Flood Relief and Absence of Flood Insurance, WangYi News, 2016 available at http://news.163.com/16/0707/02/BRBBATRB00014AED.html.

  14. See The Insurance Compensation System for Natural Disasters, 1981.

  15. See The Earthquake Insurance Law, 1966.

  16. See The Relevant Laws of Earthquake Insurance, 1966.

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Acknowledgements

Funding was provided by National Natural Science Foundation of China (Grant no. 21676205) and National Social Science Foundation of China (Grant no. 17ZDA140).

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Authors and Affiliations

  1. Tongji University, Shanghai, China

    Yiqiu Jiang & Yong Luo

  2. East China University of Political Science and Law, Shanghai, China

    Xiaofeng Xu

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  1. Yiqiu Jiang
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  2. Yong Luo
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  3. Xiaofeng Xu
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Correspondence to Yong Luo.

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This article is a part of a Topical Collection in Environmental Earth Sciences on Climate Effects on Water Resources, edited by Drs. Zongzhi Wang and Yanqing Lian.

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Jiang, Y., Luo, Y. & Xu, X. Flood insurance in China: recommendations based on a comparative analysis of flood insurance in developed countries. Environ Earth Sci 78, 93 (2019). https://doi.org/10.1007/s12665-019-8059-9

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