China Residential Earthquake Insurance Pool Is Established,China Re P&C Acts as the Sole Reinsurance Observer to the Pool
On April 16, 2015, the China Residential Earthquake Insurance Pool (CREIP) was officially established in Beijing. The research that went into launching this Pool served as an important validation of the need for catastrophe insurance in China, as well as its promotion, for the first time, on a country-wide basis. These developments marked a big step forward in establishing a formal catastrophe insurance system in China. China Re P&C was responsible for rate-making as well as the design of the earthquake insurance products and the risk-diversification mechanism in the preparation of the Earthquake Insurance Pool. The company also submitted special reports to the China Insurance Regulatory Commission (CIRC) during the CREIP preparatory process.
CREIP is composed of 45 qualified property and casualty primary insurance companies, with China Re P&C acting as the sole reinsurance observer to the Pool. The responsibilities of China Re P&C in the Pool include, but are not limited to, participating in the discussion of and making suggestions on important matters, assessing the Pool’s portfolio of earthquake risks and estimating the maximum possible loss, designing or amending the insurance products, rates, and the earthquake risk-diversification mechanism for the Pool, assisting in the design of reinsurance programs, and assuming reinsurance responsibilities. All these lay the groundwork for China's catastrophe insurance system to play a greater role in the future.