Agricultural and Natural Catastrophe Insurance Forum
Natural disasters occur frequently in China and are widely scattered. They affect individuals, businesses and governments alike. Up until recently, however, those at risk have largely ignored the potential financial impact of natural disasters when accounting for their financial and fiscal liabilities. Moreover, they have not set aside any contingent capital to prepare for such liabilities. For government bodies, in particular, this protection gap is highly significant as it could grow exponentially in coverage and scale in the future.
When the Chinese State Council carried out a review of the insurance industry a few years ago, it identified this challenge and issued a mandate to formulate and promote natural catastrophe schemes. In response, Swiss Re worked together with the Development Research Center of the State Council (www.en.drc.gov.cn) to report on “Parametric Insurance and Reform of Natural Disaster Relief Systems in China”. This was subsequently discussed with high-level officials and led to the development of two pilot programmes in the provinces of Heilongjiang and Guangdong, which were successfully launched in 2016 (see Ramping up natural disaster insurance in China).
In 2016, the Centre for Global Dialogue organised the “Agricultural and Natural Catastrophe Insurance Forum” to discuss the underlying challenges, assess possible solutions and share experiences. Nearly 40 Chinese government officials and insurance professionals met with international experts to explore the feasibility of introducing parametric solutions across China, drawing on the learnings offered by the two pilot projects in Heilongjiang and Guangdong. In addition, experts from Swiss Re and other organisations elaborated on the latest developments in flood risk management, catastrophe bonds, agricultural and aquaculture insurance, and public-private partnerships.