英文摘要 |
In recent years, Taiwan has been threatened by flood risk. This study attempts to evaluate the flood insurance premium in Taiwan. Particularly, we focus on the catastrophic feature of flood losses and apply three tail risk measures to evaluate the premium. Dynamic financial analysis is carried out to examine the effect of risk measure on the financial soundness of the insurer. The effects of the deductible and reinsurance are also investigated. We employ the domestic flood model proposed by Kang (2005) to simulate flood loss using the Keelung River District as an example. The asset model for dynamic financial analysis is built based on the asset allocation of a domestic property liability insurance company. We find that the probability of insolvency of insurers is high when they apply the expected value to price flood insurance. In order to reduce the risk, insurers have to apply CTE or TSD to measure the premium for flood insurance. Moreover, we find that the reinsurance mechanism could significantly reduce the insolvency risk. The evaluation framework and the simulated results in this paper can benefit the government or insurance companies who deal with flood insurance. |