Extreme events in region having increasing business-interruption impacts worldwide
With insurance penetration increasing across Asia, insurers and reinsurers were becoming more aware of potential peril risks, according to senior scientist and meteorologist at Aon Benfield Impact Forecasting Steve Bowen (pictured).
Bowen said the big challenge was to “properly assess risk and be proactive in preparation for the advent of an extreme event”.
“The enormity of the Thailand floods and the Tohoku earthquake/tsunami in 2011 highlights the reality that extreme events of such sizes can have severe impacts - particularly in regards to business interruption - across the entire continent that also stretch throughout the rest of the world,” he said.
Significant flood events in August continued a trend that has been ongoing since the start of the year, Bowen said, with multibillion-dollar economic flood losses recorded across parts of Australia, Indonesia, Canada and central Europe.
He added that worldwide year-to-date economic flood losses of $57bn were the third highest since 2000. “Only 2010 and 2011 have seen higher annual flood losses since the turn of the century, both of which saw losses beyond $100bn,” he said.
“There is now a general understanding that flood events are bound to happen, given the intense seasonal monsoons that are experienced in South-east Asia.”
Aon Benfield’s latestImpact Forecasting Global Catastrophe Recap report estimates that flooding in the Asia Pacific region caused more than $10bn in economic losses in August alone.
China worst hit
China’s north-east province of Heilongjiang was worst hit, sustaining much of the estimated $6.25bn suffered in economic losses across the country. In the Philippines, exceptional rain inflicted losses estimated at $2.19bn. Flooding in Pakistan killed at least 208 people, while the government estimated agricultural losses alone to be $1.89bn.
Typhoon Utor made up the rest of the damages after it made two separate landfalls in the Philippines and China’s south-eastern province of Guangdong.
Bowen said the large number of natural disasters across Asia in recent years underscored the increasing importance of catastrophe modelling in the region.
“For example, following the Thailand floods in 2011, Impact Forecasting was able to develop a flood model for the country that can help quantify future events as well as better assess vulnerabilities for residential, commercial and industrial lines of business,” he said.
Bowen said that it was difficult to predict if there would be further damaging flooding in the region in what remains of 2013. “Obviously there are continued concerns of flooding in Asia, and with the western Pacific typhoon season remaining active, any landfalling system - over even a close approach without landfall - could enhance floods already occurring,” he said.