Yunnan’s unique geographical location and complex climate make it prone to frequent meteorological and geological disasters, making the modernization of disaster management systems and capabilities an urgent task.

Against this backdrop, Li Yunxian, Deputy Dean and Distinguished Professor of the School of Finance at Yunnan University of Finance and Economics, proactively took on the challenge. Leveraging the Yunnan Catastrophe Risk Management Research Center, she formed a catastrophe risk management research team. As the team leader, she led key faculty members from the insurance and financial engineering departments to focus on research areas such as catastrophe insurance and catastrophe risk derivatives, risk assessment and actuarial pricing, and natural disaster risk assessment.

“In simple terms, catastrophe risk management research involves using statistical principles to assess and analyze risks from major disasters like earthquakes, and then managing these risks through financial and insurance methods,” explains Li Yunxian. Statistics is a mathematical method for data searching, organizing, and analyzing. Catastrophe risk assessment and analysis involves analyzing loss data caused by major disasters using statistical methods and constructing models based on related disaster mechanisms to predict future catastrophe losses. Statistical methods play a crucial role in disaster loss analysis, risk assessment, and disaster prediction.

Currently, catastrophe insurance is a primary method of catastrophe risk management and plays a significant role in disaster reduction and relief efforts. Its functions of risk transfer, risk sharing, and loss compensation not only transform the traditional single-mode of government disaster relief but also improve the natural disaster relief mechanism. It accelerates the construction of an emergency management system that involves social forces and market mechanisms.

The team has gathered catastrophe risk management research talents from home and abroad, and collaborated with experts within and outside the province. This has resulted in a high-level research team with a distinct feature in the field of digital catastrophe risk management research, aiming to achieve a leading position nationally. The team conducts interdisciplinary innovative research and has trained a group of outstanding talents in risk management. This has led to a mutual promotion and integration of scientific research and talent cultivation, providing scientific support for solving economic and livelihood issues and for establishing and improving the national disaster risk management system and catastrophe insurance system.

During the “14th Five-Year Plan” period, in the face of the goals for modernizing the emergency management system and capabilities, Li’s team, relying on the new think tank for disaster prevention and reduction in Yunnan Province, also faces new challenges. She will continue to focus on catastrophe risk management research and lead the team in collective efforts to solve economic and livelihood issues, contributing to the modernization of social governance in Yunnan Province.

(This article was reprinted from the September 27, 2023, issue of Yunnan Daily, page 7.)