|其他題名: ||A study of property insurance ratemaking on catastrophe loss|
|作者: ||李家瑋;Li, Jia-wei|
|關鍵詞: ||巨災損失;費率釐訂;特別準備金;安全率;逆選擇;Catastrophe Loss;Ratemaking;Special Loss Reserve;Factor of Safety;Adverse Selection|
|上傳時間: ||2010-09-23 15:57:11 (UTC+8)|
Recently, catastrophes occur more frequently than before around the world, for example, greenhouse effects, rising sea levels and anomalies in climate. These catastrophes have caused heavy losses of human life and property. Some small island countries are threatened with extinction and are forced to migrate to other places or to buy pieces of land from other governments. As some developing countries are growing rapidly, it is not easy to strike a balance between economics and environmental protection. World population is growing rapidly and economics tends to have targeted development. The subject matters insured tend to be highly valued. In case a disaster happens, the amount of compensation will be extremely high, and it might make stable management of an insurance company impossible and lower its solvency. Eventually, some might shut down.
Catastrophic risk occurs most frequently in Asia, however, insurance business is not as popular as that in Europe and America. When it comes to insurance compensation, Asian companies tend to pay low insurance indemnity. Unlike Asian companies, companies in the United States and Europe can pay a much higher indemnity due to the popularity of insurance purchase and low frequency of catastrophic happenings. Taiwan is located in an earthquake zone and is surrounded by the sea, so disasters caused by earthquakes and typhoons are common in Taiwan. On September 21, 1999, Taiwan underwent a powerful magnitude 7.3 earthquake. At that time, among those who buy fire and automobile insurance, only 1% of them had additional earthquake insurance. It is obvious that people in Taiwan tend not to buy earthquake insurance. In this case, people are not likely to lessen their loss of properties via the purchase of earthquake insurance. It might be a good chance for the government to make aware of the importance of purchasing catastrophe insurance and to impose catastrophe insurance on people or to encourage voluntary purpose. This might lessen people’s loss caused by natural catastrophe.In addition to an overview of natural catastrophes and the significance of setting insurance rates, this paper also presents the process of calculating insurance rates. In the process, I also consider the price index in order to have reasonable estimation of the insurance rates for a catastrophe. Furthermore, I suggest that our government can re-examine the existing system of production insurance rate and establish statistical databases of catastrophic loss and train property and casualty insurance actuarial experts. On the other hand, it is hoped that catastrophic risk management can be enhanced through legislative means in order to motivate people to buy universal catastrophic insurance.