News Non-Life23 Jan 2019

China:Floods in northern parts cause US$5.7bn economic losses in 2018

| 23 Jan 2019

Floods in Northern China between July and November last year rated among significant Nat CAT events in the Asia Pacific last year. The Northern China floods caused economic loss of over $5.7bn, says Aon, a leading global professional services firm providing a broad range of risk, retirement and health solutions.

China also fell victim last year to the destructive cyclone, Typhoon Mangkhut, which also struck Guam, Northern Mariana Islands, Philippines and Hong Kong. Mangkhut caused $6bn in economic losses and $1.3bn in insured losses, says Aon in its “Weather, Climate & Catastrophe Insight: 2018 Annual Report” released yesterday.

Asia Pacific:  Higher economic loss events are expected to increase

In the Asia Pacific, both economic and insured losses from natural disasters and weather-only events (excluding earthquakes, volcanoes and tsunami) have increased since 2000. With rapid population and exposure growth in some of the world’s most vulnerable areas, higher economic loss events are expected to increase in the coming years.

The Aon report says that last year, Asia Pacific had a largely expected year in terms of the occurrence of natural catastrophes with 144 separate events causing at least 10 deaths and/or $50m economic loss and/or $25m insured loss–5% more than the average number of disasters since 2000.

The APAC region suffered economic losses of over $89bn in 2018 due to natural disasters. This was slightly higher than the 21st century average ($87bn) and over 50% higher than the median loss since 2000-2017 ($57.5bn).

The overall insured loss ($20.6bn) for APAC was nearly 91% higher than the average insured loss for 2000-2017 ($10.8bn) and nearly 300% higher than the median loss ($5.2bn). The elevated insurance losses were predominantly driven by several high-loss events in Japan where the insurance penetration is significantly higher than much of the rest of the region. In the 21st century, the insured losses incurred in the present year were second to only to that of 2011 ($80bn).

The main drivers of economic loss in 2018 were tropical cyclones followed by flooding and drought. Losses due to tropical cyclones far exceeded the long-term average. Losses due to droughts, and winter weather were also higher than the 2000-2017 average. Economic losses from earthquakes, severe weather, and wildfire were lower than the long-term average.

Top 3 costliest events in 2018

Despite the Nat CAT damages seen in China, the top three most expensive events of 2018 in Asia Pacific, in terms of economic as well insured loss, all occurred in Japan. At the beginning of September, Typhoon Jebi prompted a $13bn economic loss and $8.5bn in insurance payouts. Typhoon Trami made landfall in Japan at the end of September causing an estimated economic loss of $4.5bn with insurance payouts reaching $2.6bn at the time of the report. In July, the remnants of Typhoon Prapiroon intensified the Mei-Yu rains causing widespread flooding in Japan. Economic loss due to the event reached $10bn with $2.65bn of that covered by insurance.

Most deadly events

The deadliest events of 2018 all occurred in Indonesia. In September, an M7.5 earthquake that occurred in Indonesia in September which a tsunami and resulted in 2,256 deaths and an economic loss of $1.45bn. In August, the Lombok Earthquake killed 560 people in the country. On 22 December, eruptions from the Anak Krakatoa Volcano triggered underwater landslides and a tsunami that killed at least 437 people.

Other high death toll events elsewhere included monsoon floods across India between June and September which caused 1,424 deaths and the Japan floods in July which killed 246 people.

Global losses

Globally, 394 natural catastrophe events in 2018 generated economic losses of $225bn. Of that total, private sector and government-sponsored insurance programmes covered $90bn – the fourth-highest year on record. This means the protection gap, which is the portion of economic losses not covered by insurance, was 60% and at its lowest level since 2005.

| Print | Share

Note that your comment may be edited or removed in the future, and that your comment may appear alongside the original article on websites other than this one.


Recent Comments

There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.

Other News

Follow Asia Insurance Review