Flood insurance in China: recommendations based on a comparative analysis of flood insurance in developed countries

Flooding is a serious natural disaster that has caused massive economic losses in China. The development of an effective flood disaster relief mechanism is of increasing significance, and some argue that flood insurance is an optimal solution. Currently, China uses post-disaster government aid as its main disaster relief policy, which is considerably less efficient than insurance. Thus, it is critical for China to establish a rational flood insurance system. As flood insurance is common among developed countries, a wealth of experience has been accumulated that can provide rich references for the construction of a Chinese flood insurance system. Hence, this paper will comparatively analyze the flood insurance systems of four representative developed countries and provide insight into the applicability of British and American insurance systems to China. Subsequently, suggestions will be made regarding the establishment of a Chinese flood insurance system, which include issuing legislation, establishing compulsory commercial insurance and securitizing flood insurance.