Vulnerability Analysis of Insurance System Based on the Two-Layered Complex Network

• 1、Finance and Statistics School, Hunan University, Changsha, 410079

Abstract：Based on the complex network theory, this paper proposed the definition of the vulnerability of the insurance system. Secondly this paper analyzed causes of the vulnerability of insurance system from reinsurance and group, and built a reinsurance-group Two-Layered Complex Network, and introduced a cascading failure model into the Two-Layered Complex Network. Finally, this paper explored the degree and characteristics of dynamic vulnerability of insurance system under different attack strategies and different parameter combinations based on the Two-Layered cascading failure model. The main conclusions are as follows. The first is that reinsurance companies and large original insurance companies are located in the densely-connected areas of the reinsurance network and are the main objects of risk diversification. Some large insurance groups are located in a dense network of group networks, which play a vital role in the entire network. Second, in the Two-Layered Complex Networks, the reinsurance network is more fragile than the group network. The Two-Layered Complex Networks is more vulnerable to deliberate attacks and when the risk load and risk capacity are linear.

Keywords： kInsurance, dynamic vulnerability, Two-Layered Complex Networks, Cascading Failure Model