Improving resilience to natural disasters in China
We made an important contribution to the development of natural catastrophe insurance markets in China. At present, insurance protection against natural catastrophes is very low in China: It is estimated that payouts usually cover less than 1% of economic losses, so there is an urgent need to improve resilience to disasters such as earthquakes and windstorms.
In a review of the insurance industry, the State Council recently issued a mandate to formulate and promote natural catastrophe schemes, which has sparked a lot of interest at both central and provincial levels. We have worked with the China Development Forum to produce a report on “Parametric Insurance and Reform of Natural Disaster Relief System in China”, which was discussed with high-level officials, and we are now involved in setting up major pilots in two provinces. These schemes are being designed to provide contingency funding for disaster relief and reconstruction efforts based on parametric triggers.