China will create an earthquake insurance system

The China Insurance Regulatory Commission (CIRC) and the China Earthquake Authority (CEA) signed a strategic cooperation agreement in Beijing on Thursday to promote and create a China-specific earthquake insurance system.

The earthquake and disaster insurance system will seek to use a market mechanism to support disaster relief efforts and reduce the government’s financial burden to compensate for losses.

The two sides will work closely to develop a legal system for earthquake insurance, establish an earthquake and earthquake risk insurance laboratory in China, manage disaster relief, and promote a China-specific earthquake insurance system.

CIRC Chairman Xiang Junbo said the CIRC will work with CEA to enhance the insurance industry’s ability to serve the economy and society through scientific advances, striving to minimize damage from earthquakes and other natural disasters for insurance purposes. and scientific advances are of greater benefit to the general public.

Zheng Guoguang, director of China’s Earthquake Management Authority, said the signing of a strategic cooperation agreement would further improve China’s earthquake protection and disaster management, transform the rescue model from a government aid model into multisectoral cooperation, and further improve national disaster relief systems. …
China’s insurance industry has begun to move forward in adopting a market-based approach to compensation for damages from natural disasters, including earthquakes.
On May 11, 2016, 40 direct insurance companies and five reinsurance companies formed the China Urban and Rural Residential Earthquake Disaster and Earthquake Insurance Fund (CECIP).
By the end of 2016, the total number of insurance policies sold had reached 180,000, and the premiums had reached RMB 17.76 billion, nearly US $ 2.6 billion.