(1) catastrophe insurance futures
Catastrophe insurance futures were first introduced by Chicago Stock Exchange on 1992, which set a practical precedent for the transfer of insurance risks to the capital market. However, due to the design defects of financial futures products and the immaturity of financial futures market, trading was suspended shortly after listing. The main reasons for its failure are as follows: (1) The catastrophe information disclosure of American insurance service office is insufficient, and information asymmetry frequently appears in futures market; (2) There are more risk-averse people than speculators in the futures market; (3) The insurance industry is unfamiliar with the operation process of catastrophe insurance futures products and lacks corresponding financial knowledge; (4) For speculators, the losses are too great and the risks are too concentrated.
(2) catastrophe insurance selection
When an insurance company buys an option contract in the option market, it is equivalent to buying a price option in the future, that is, the insurance company can choose whether to trade at the market price or at the execution price agreed in the option contract.
1. The spread product of catastrophe option was introduced to the Chicago Board of Trade on 1995, and the catastrophe insurance call option is one of them, namely the PCS index option. This option contract is a European call (call) option, which can only be executed according to 9 kinds of PCS index transactions calculated by the Property Claims Service Center. Each index represents the estimated insurance losses caused by catastrophic events in 9 regions 1 region in a certain period divided by 1 billion dollars. Each option has two indexes, A and B (A
C(T，LT)=min(max(LT—a，0)，b—a)
Where A is the execution index agreed in the contract, B is the capping index agreed in the contract, and LT is the PCS index at time T. ..
2. The catastrophe option of Bermuda Commodity Exchange, namely the GCCI index option. 1997165438+1October, Bermuda Commodity Exchange (BCOE) launched the GCCI catastrophe index option similar to the PCS catastrophe index option traded on Chicago Board of Trade. Although the basic concepts of these options are the same, the specific features of BCOE options are somewhat different: (1) Loss events are based on the GCCI catastrophe risk index, which is updated quarterly. Its compilation is very detailed, including not only the regional classification index, but also the index compiled by postal code area. (2) Effective geographical contract. (3) Three different types of catastrophe options: single loss, that is, the largest catastrophe event in a period of time, and intermediate loss, that is, the second largest event and cumulative catastrophe. (4) The risk period of the option is half a year. (5)BCOE option is a kind of "binary options", and it is possible to pay $0 or $5,000 on the expiration date of the option, so there is no intermediate value. (6) Determine the quarterly interval of the index value (1, 4, 7, 10, 13 months after the end of the risk period). In the above-mentioned quarterly interval, whether the option is exercised depends on how much the exercise price exceeds or falls below the index value.