Analysis of the Relationship Between Extreme Weather Disasters and Claim Ratio Volatility Under Global Climate Change

Frequent extreme weather events cause significant loss of life and property, highlighting the link between “extreme weather risk – catastrophic loss – high claim ratio – insurer solvency.” However, little research explores the mechanisms among these factors. This paper analyses the relationship between extreme weather and property insurance claim ratios, using data from 30 Chinese provinces (2012-2021). It constructs indices for high temperature, low temperature, and heavy precipitation, showing a strong correlation between extreme weather and claim ratios. Over 3- and 5-year periods, these indices significantly increase claim ratios, leading to complete or partial mediation effects on the solvency of property insurance companies.