On August 22nd, at the 3rd China Reinsurance Catastrophe Risk and Insurance Summit & China Earthquake Catastrophe Model Press Conference, China Reinsurance (Group) Corporation (China Re) launched “China Earthquake Catastrophe Model v2.0”, which is China’s first proprietary commercial earthquake catastrophe model certified by the Seismological Society of China. This is a milestone event that will fundamentally change China’s long dependence on foreign earthquake catastrophe models, and systematically improve the capacity of China’s earthquake catastrophe risk quantitative management.
Since the establishment of China Reinsurance Catastrophe Research Center in 2017, China Re has been holding the Catastrophe Risk and Insurance Summit for three consecutive years. Mr. Shen Rujun, General Manager of Central Huijin Investment Company, Mr. Niu Zhijun, Deputy Director-General of China Earthquake Administration, Mr. Dong Degang, Deputy Director-General of the Financial Department of the Ministry of Finance, Ms. Wang Simiao, Deputy Director-General of the Intermediary Supervision Department of China Banking and Insurance Regulatory Commission and Mr. Yuan Linjiang, Chairman of China Re, attended the summit and delivered speeches. Nearly one hundred experts from the Ministry of Science and Technology, the Emergency Management Department, seismological science research institutes and the insurance industry witnessed the launch of “China Earthquake Catastrophe Model v2.0” and conducted in-depth exchanges on earthquake catastrophe issues.
“China Earthquake Catastrophe Model v2.0” is an important achievement made by the government, academia and enterprises through their concerted innovation . In order to better develop this model, China Re initiated China’s first fin-tech company of catastrophe risk control – China Re Catastrophe Risk Management Company, and brought in a professional model development team with overseas working experience. China Re has integrated valuable scientific research and data resources with the support of professional research institutes including the Institute of Geophysics and the Institute of Engineering Mechanics of China Earthquake Administration. China Re applied for the State Key Research Project, “Earthquake Insurance Loss Assessment Model and Applications”, and received special fund from the Ministry of Science and Technology of China. The above-mentioned work ensured that the model development was completed within two years. Currently, the model has been recognized by the Seismological Society of China as a first-class international model. The model platform has also been tested and certified by authoritative software evaluation agencies, with complete technological verification certificates, user documents, technological documents, and training and operational service systems. The model is thus fully-qualified and ready for commercial use.
“China Earthquake Catastrophe Model v2.0” was well-received by summit attendees for its high scientific value, broad application scenarios and easy adaptation. Its high scientific value means that the model can simulate an random event set of up to 300 million earthquakes in China and its neighboring areas, in a time span of 5 million years. It is the first model that can accurately estimate economic and insured losses for tens of thousands of buildings with different construction types, building occupancies, heights, construction periods, and earthquake fortification levels. The fast simulation process delivers accurate data of China. Its broad application scenarios means the model can provide insurers a commercial product with detailed catastrophe risk zonings, risk limit control, swift assessment of insured losses, and optimization of reinsurance solutions. Furthermore, it helps government agencies and official units to quickly assess economic losses in earthquake aftermaths and assists government planning for earthquake prevention and relief. Its easy adaptation will offer customized solutions and an online-offline integration, allowing users to use this model both online or install it in their own system. The wide adaptation of this model will assist China’s insurance sector to further reduce foreign model dependency, improve self-independent science and technology strengths, cut cost and be more accurate in earthquake loss assessments.
Shen Rujun, General Manager of Central Huijin Investment Company, pointed out that as the “National Team” of China’s reinsurance industry, China Re has actively responded to the nation’s call and the development requirements of the insurance industry. The independently developed earthquake catastrophe model marks a major scientific breakthrough in China’s catastrophe risk control sector. Central Huijin Investment Company will support China Re’s efforts in establishing China’s catastrophe risk control system, and hopes that China Re will uphold its original aspirations unswervingly, fulfill its glorious mission as the national reinsurer to pool more wisdom and strengths for the progress of the insurance industry.
Niu Zhijun, Deputy Director-General of China Earthquake Administration, commented on the launch of China Re’s new model. The model actively promotes the commercial use of professional and technological innovation in catastrophe risk control area, and sets a milestone in China’s earthquake insurance development. Looking ahead, China Earthquake Administration will continue facilitating China Re’s progress in earthquake insurance, join hands with all relevant parties to raise public awareness in earthquake risk mitigation, and see that the common goal of minimizing earthquake risks being achieved.
Dong Degang, Deputy Director-General of the Financial Department of the Ministry of Finance, remarked that the government and the market must jointly build a catastrophe risk prevention mechanism, and this permits no delay. China Re’s new model provides valuable tools for decision-makers and relevant parties in their work of earthquake information quantifying and decision-making. The Ministry of Finance will continue supporting catastrophe insurance development, and discuss the possibility of a disaster prevention and relief system that incorporates catastrophe insurance. China Re will scale new heights and assume its reinsurance responsibilities in establishing the catastrophe risk control system.
Wang Simiao, Deputy Director-General of the Intermediary Supervision Department of China Banking and Insurance Regulatory Commission, pointed out that China Re’s proprietary model is a meaningful practice that echoes with national strategies and serves the development of the insurance industry. The model is hoped to improve the technological level of China’s catastrophe risk control and play its unique role in supporting national strategies.
Yuan Linjiang, Chairman of China Re, said that the Central Committee of the CPC specifically pointed out that we must build an effective and scientific natural disaster prevention and control system. Reinsurance is an indispensable part in the nation’s catastrophe risk control system building process. The release of “China’s Earthquake Catastrophe Model v2.0” injects new momentum into the insurance industry’s deep involvement in earthquake disaster prevention and mitigation. It is a milestone, filling China’s blank of a proprietary and controllable earthquake catastrophe model that fits the nations needs. Additionally, it is a fruitful result in implementing China Re’s strategies of “One Core, Three Breakthroughs and Five Leaps” and “Platform-Orientation, Technology Application and Globalization”. Together with its fellow partners, China Re will carry on building this professional, innovative, open and shared catastrophe platform for the insurance industry, supporting technological breakthroughs and the application of catastrophe risk control model, and making due contributions to the building of China’s modern risk control system.
The summit focused on China’s seismic risk control and insurance practices. Ou Jinping, Academician of Chinese Academy of Engineering, Gao Mengtan, former Deputy Director-General of the Institute of Geophysics of China Earthquake Administration, Wang He, Vice Chairman of China Association of Actuaries, Zhang Jianguo, Chief Engineer of Yunnan Seismological Bureau, Ryan Crompton, General Manager of Australia Risk Frontiers, Paul Somerville, Chief Geoscientist of Australia Risk Frontiers, Chen Sen, Chief Actuary of China Pacific Life Insurance Co. Ltd., Fan Jiemin, General Manager of the Group Property Insurance Department of China Pacific Life Insurance Co. Ltd., Li Xiaojun, Secretary-General of Seismological Society of China, Zuo Huiqiang, Chairman of China Re Catastrophe Risk Management Company, Feng Jian, General Manager of China Re Catastrophe Risk Management Company, Zhou Junhua, Deputy General Manager of China Re Catastrophe Risk Management Company, and other local and international experts and insurance industry veterans, conducted in-depth discussions and exchanged ideas on topics such as China’s earthquake model development and commercial application, earthquake emergency control system establishment, post-earthquake reconstruction, earthquake insurance pilot application, and international earthquake insurance experiences.
He Chunlei, Vice Chairman and President of China Re, hosted the summit, and commented that the launch of China Re’s earthquake catastrophe model marks a new beginning of the company’s contribution to China’s modern risk management. China Re will leverage China Re Catastrophe Risk Management Company as an innovative platform to integrate resources from all parties, and accelerate the establishment of China’s catastrophe insurance industry infrastructure. China Re will continue assisting the Chinese government and the insurance industry to improve their catastrophe risk control capabilities, and safeguarding the good life of the Chinese people.
