Taking into consideration China's specific situations, we found that the reserve fund was optimal for a minor catastrophe loss, and the part in excess should be financed by the cat bond.
After many years without noteworthy large risk and catastrophe losses, China has been surprised by two large catastrophic events in 2008.
As the hurrricane season draws to a close this week, the lack of big storms making landfall in the US this year has pushed reinsurers' catastrophe losses to historically low levels.
