Recent rampant flooding in Thailand – losses for which are the country’s highest ever from natural disasters – has underscored a significant increase in weather-related disasters in Asia Pacific. Munich Re’s natural catastrophe database – NatCatSERVICE – shows that weather-related catastrophes have more than tripled over the last 30 years. In China alone, weather-related disasters have quadrupled since 1980.
Munich Re says that a burgeoning population, urbanization and increasing wealth means economic losses from these disasters will also continue to rise. Insurance density remains low in much of the region, with about six percent of natural catastrophe losses insured in the last 30 years.
“Year to date, the region has borne the brunt of natural catastrophe losses,’ said the insurer. “Eighty percent of all economic losses from natural disasters in the first nine months occurred in Asia Pacific. With the earthquakes in New Zealand and Japan, the floods and cyclone in Australia, and flooding across many countries in Central and South East Asia, the economic losses in the region came to US$ 259bn in the first nine months of 2011, around US$ 52bn of which was insured.” Economic losses worldwide from natural disasters amounted to $310 billion for the same three months.
Munich Re’s data showed that over the last 30 years, Asia Pacific has experienced more than 50 percent of all fatalities from natural catastrophes, almost 40 percent of all economic losses but less than 9 percent of the insured losses.
This shows the urgent need for wider natural catastrophe insurance coverage. This can be met through a variety of measures, from traditional insurance and reinsurance, to public-private partnerships or pooling of natural catastrophe risks nationwide, said the insurer.
“Such public-private partnership solutions can provide durable economic stability to societies and government budgets by offering significant financial relief when disaster hits, immediate liquidity to governments and citizens, assistance in balancing government budgets and help with risk prevention and post-disaster management”, commented Ludger Arnoldussen, member of Munich Re’s Board of Management.
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