Chinese pilot insurance scheme to cover natural disasters

China is said to be testing out a new insurance scheme that will aid in the reconstruction of infrastructure following natural disasters.

At the moment, reconstructive work to get large areas back on their feet following a natural disaster is funded by the government, and by donations and aid from other countries. This scheme hopes to spread the cost to the insurers, to alleviate the costs to the state, and also to expand the insurance sector.

The government will also be setting up a calamity fund, according to Wang Zuji, vice chairmen of China Insurance Regulatory Commission. However, he did say that it was “a very difficult project” and therefore may take some time to integrate fully into the economy.

“The momentum in the pilot schemes is very good and that gives a tremendous support for the establishment of a catastrophe insurance system,” Mr. Zuji said.

China is vulnerable to natural disasters, such as earthquakes, and this pilot scheme could drastically aid the recovery of the infrastructure following such an event.

As a pilot scheme, although it may be difficult to get it working smoothly within the economy, it could stand as an example to other countries that are at risk of similar natural disasters, and the ruin that they can bring to the economy. This kind of insurance deal can give countries a greater ability to help themselves recover.

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