Abstract: The operation process of insurance company is affected by a variety of uncertain internal and external factors.The changes in these factors,especially unexpected ones,will lead to the financial risk in the property insurance company.There are two types of change in the insurance company’s financial risk,including gradual change and catastrophic change,which is jumping and discontinuous.This paper first introduces the catastrophe theory,and then creates the property insurance companies’ financial risk measurement model based on that theory.Finally,this paper measures the financial risk of the 22 sample property insurance companies in 2009 by using the catastrophe progression method,in accordance with the insurance companies’ different selected financial index systems based on the extension method.

Key words: catastrophe theory, extension method, financial index system, catastrophe progression method