Insurance claims could reach all-time high in 2018 as climate change increases severity of natural disasters

Insurance losses from Typhoon Mangkhut, which was not included in Allianz’s report, to cost sector up to US$2 billion in China, Hong Kong and Macau

Claims resulting from storm damage in Hong Kong top the list for Allianz

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A car is submerged in Heng Fa Chuen during Typhoon Mangkhut, which was the strongest on record to hit Hong Kong. Insurance claims related to storms are on the rise in the city. Photo: Sam Tsang

Published: 7:04am, 13 Dec 2018Updated: 10:40pm, 13 Dec 2018

This year could be the most expensive on record for insurers as climate change increases the severity and volatility of natural catastrophes worldwide, while storm damage tops the list of corporate claims in Hong Kong, according to a leading insurer.

Global insured losses from natural disasters this year – from wildfires in California, to floods in Sydney and super typhoons in Asia – will at least equal if not exceed the US$144 billion in 2017, according to Allianz.

“Scientists predict that the storms and typhoons will continue to get stronger and more frequent as a result of global warming – that is the trend we are seeing now,” said Patrick Zeng, CEO of Hong Kong and Greater China at Allianz Global Corporate & Specialty (AGCS), in an interview with the Post, adding that claims payout will get bigger and bigger.

Damage caused to One Harbourfront in Whampoa, Hung Hom after Typhoon Mangkhut hit Hong Kong on September 16, 2018, leaving a trail of destruction behind. Photo: Felix Wong

In Hong Kong, storm damage and losses were the top cause of corporate insurance claims from July 2013 to 2018, according to Allianz’s 2018 Global Claims Review released on Thursday. These accounted for 38 per cent of the value of the 1,169 claims analysed, totalling €22.4 million (US$25.4 million), despite making up just 10 per cent of the actual number.

Claims due to property damage and business disruption from the five typhoons that hit Hong Kong between June and October 2017 reached HK$935 million (US$120 million), with Typhoon Hato accounting for almost HK$858 million, according to the Hong Kong Federation of Insurers.