摘要
Massive losses from catastrophe risks are too large to be financed by China＇s insurance and reinsurance companies＇ capital. They could seriously affect their financial stability. They should focus on less volatile, smaller, profitable risks. A capital markets risk transfer approach is better suited to China＇s circumstances and needs. This article presents one of many capital market solutions that can overcome unaffordability and other deficiencies in using insurance solutions in the Shenzhen, Yunnan and other pilot projects. Using insurance solutions can make the need for government subsidies and costs of coverage larger as more coverage is provided.
