Flood claims show China poorly insured for disasters
Insurance claims for damage from recent heavy rains just 1 billion yuan
The recent flooding in China is expected to result in insurance claims amounting to 1 billion yuan (HK$1.16 billion), a tiny fraction of the economic losses incurred by the disaster because of a lack of insurance coverage, according to Swiss Re.
Heavy rain in the past two weeks led to floods and landslides in Hunan, Hubei, Henan and Anhui, sweeping away houses, cars and inundating farmland.
In Hunan and Hebei, the China Insurance Regulatory Commission says claims from the two places have reached a billion yuan.
However, the claims represented only 1.2 per cent of the economic loss in Anhui and 3.6 per cent of the damage in Hubei, according to Clarence Wong Shek-fai, the Asia-Pacific head of economic research and consulting at Swiss Re.
“This showed China is substantially underinsured for natural catastrophes. The New Zealand earthquake in 2011 had 50 per cent of its economic loss covered by insurance policies,” Wong said.
Wong said the major claims in Hubei were for the loss of industrial properties, followed by cars and agricultural products. In Anhui, most of the damage was in the agricultural sector, with few claims for property and car losses.