Large cat losses hit China but only 2% of damage covered by insurance
China faced the worst flooding since 1998, leaving the country with an economic toll of $33 billion. Only 2 percent of the damage is covered by insurance, according to Aon Benfield’s global catastrophe recap report for July.
The report, put together by Impact Forecasting, Aon Benfield’s catastrophe model development team, stated that nearly 20 provincial regions were impacted by floods in the Yangtze River Basin area and in the northeast of the country, aggravated by substantial seasonal “Mei-Yu” rainfall.
As a result of the natural catastrophe, 764 people were left dead or missing, and more than 800,000 homes and structures were damaged and destroyed, according to data from China’s Ministry of Civil Affairs.
The China Insurance Regulatory Commission cited insurance claims pay-outs representing less than 2 percent of the economic cost, with most of the claims from lost agriculture. An estimated 18 million acres of cropland were damaged by floodwater.
Adam Podlaha, global head of Impact Forecasting, said: "While it was expected that China would see above normal rainfall during the peak monsoon months with such a strong El Niño, the intensity and scope of what transpired from the associated floods were at a magnitude not seen in nearly two decades. The flood peril is one which is becoming better understood by catastrophe modelers, and the industry is better prepared than ever to help create awareness of the risks associated with such large events."
By contrast, the US experienced six outbreaks of severe storms and flash flooding from the Rockies to the East Coast, with public and private insurers anticipated to record losses nearing $1billion or 67 percent of overall economic costs.
