MACAU (12 October 2016) – Aon Benfield, the global reinsurance intermediary and capital advisor of Aon plc (NYSE:AON), has launched its Natural Catastrophe Report for China in Summer 2016 which highlights how China has witnessed its worst flooding since the 1-in-100 year flood event of 1998.
Aon Benfield observes how both 1998 and 2016 experienced severe flood events the year after a super El Nino. This report compares the flood events in these two years to provide reference for evaluation of major floods events in the future.
At least 130,000 claims related to storm and flood have been reported following this summer’s Yangtze River and the north-northeastern China floods. Based on government statistics, economic losses will exceed CNY255.8 billion while Aon Benfield estimates total insurance loss to reach over CNY4 billion. The latter is estimated to be approximately 1.5% of total economic loss, reflecting a low level of insurance penetration.
Analysis from Aon Benfield Analytics shows that, despite similar hazard patterns, the impact has decreased significantly since 1998 (as illustrated in table). For example 68% less crops were damaged 18 years later in this summer’s event while the Yangtze River experienced 20% higher-than-average precipitation in both events but the dam did not break in 2016.
The Chinese government has increased investment and capabilities in flood forecast and control, boosting defence systems since 1998 and acting as a major driver of the reduced flood losses in recent years.
Yifan Fu, Head of Aon Benfield Analytics Greater China, commented: “As Chinese re/insurers begin to analyse their losses from the floods, the report provides a market overview to help prepare for the renewal season. While it is still early days to predict the full impact of the summer events, it is clear that the low insurance penetration will provide a potential for growth going forward.”
Read the report: http://aon.io/2dVkFlt