State media estimate costs at $1.4bn
Severe rains and isolated extreme torrential rains have brought flooding and landslides across a large swath of southern China. The storms have resulted in the deaths of around 150 people, forced the evacuation of over a million residents and caused the destruction of thousands of homes.
RMS issued the following assessment:
According to the China Meteorological Administration (CMA) rainfall began in the region on Saturday, 13 June, and in response the agency raised its alert to orange – the second highest alert level and the first orange alert for rainstorm this year. (China’s rainy season began in May). The Administration is reporting that over the week from Saturday, 13 June areas of southern China were affected by rainfall accumulations of up to 400 mm (1.3 feet). The Meteorological Office reiterated the rainstorm orange alert on Saturday, 19 June as further heavy rainstorms affected the region. On Sunday, 20 June the forecast was for 100 – 180 mm (0.3 to 0.6 feet) of rainfall in parts of Zhejiang, Fujian, Jiangxi, Henan, Guangxi and other areas of the south, whilst other southern regions were to expect more than 200 mm (0.7 feet).
The rains have been attributed to the death of around 150 people. In addition Chinese state media has reported that over 1.4 million people living along rivers and in low lying areas in China’s south have been evacuated. Dozens of rivers in southern China, including the Pearl River in Guangdong province have exceeded safety levels. Swollen water courses have led to the reported collapse of a reservoir (the extent of which is as yet unknown), and relief agencies are calling for heightened inspection of reservoirs in the flood regions, fearing further are at risk of damage. Online reports vary considerably in terms of number of houses destroyed from reports of 68,000 to 178,000.There is also much discrepancy in reports of the extent of agricultural crop damage – the maximum extent quoted as 7,842 kilometers squares (784,200 hectares).The rainstorms have also led to power outages and widespread damage to highways. On Saturday, 19 June the Civil Affairs Ministry and the State Disaster Relief Commission raised the level for emergency response to level three and added the provincial meteorological bureaus of Zhejiang, Hunan, Guizhou to the list of emergency response that already includes Fujian, Jiangxi and Guangxi.
According to AXCO, although all household policies in China (and most industrial policies) include flood, insurance penetration is extremely low. It is likely that the region affected by the recent floods will not have a major impact on insured losses due to very low insurance penetration. Chinese state media is reporting that the direct economic loss caused by the heavy rain have exceeded 1.4 billion US dollars.