China Re launches 'China earthquake catastrophe model v2.0'
HONG KONG — China Reinsurance Group (China Re) launched the 'China Earthquake Catastrophe Model v2.0', the country's first proprietary commercial earthquake catastrophe model certified by the Seismological Society of China, at the 3rd China Re Catastrophe Risk and Insurance Summit held here on Thursday, August 22. This was a milestone 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.
Nearly one hundred experts from the Ministry of Science and Technology, the Emergency Management Department, seismological science research institutes and the insurance industry had convened for the summit, and to witness the unveiling of 'China Earthquake Catastrophe Model v2.0'. China Re has held the Catastrophe Risk and Insurance Summit for three consecutive years, since establishing the China Reinsurance Catastrophe Research Center in 2017.
'China Earthquake Catastrophe Model v2.0' is a concerted milestone achievement by the government, academia and enterprise. To develop the model, China Re initiated the China Re Catastrophe Risk Management Company, the country's first fin-tech corporation for catastrophe risk control, and brought in a professional model development team with overseas working experience.
China Re integrated its scientific research and data resources with the support of professional research institutes including the Institute of Geophysics, and Institute of Engineering Mechanics of the China Earthquake Administration. China Re applied for the State Key Research Project, 'Earthquake Insurance Loss Assessment Model and Applications', and received additional funds from the Ministry of Science and Technology. The research grants ensured that the model 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.
The model can simulate a 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, occupancies, heights, construction periods, and earthquake fortification levels, with fast simulation processes delivering accurate data for 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, the model 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.
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. The model actively promotes the commercial use of professional and technological innovation in the catastrophe risk control area, and sets a milestone in China's earthquake insurance development.
Yuan Linjiang, Chairman of China Re, said, "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 breakthrough and the application of catastrophe risk control modeling, making due contributions to the building of China's modern risk control system."
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.