High protection gap in emerging Asia

The world was devastated by 327 disasters in 2016, 191 of which were natural catastrophes and 136 man-made ones. According to a recent report by Swiss Re, economic losses from these disasters totalled US$175b, almost double the level in 2015. Asia’s economic losses of US$83b in 2016 was the highest in the world.

Swiss Re further notes that the most destructive event in Asia was the magnitude 7.0 earthquake that hit Kyushu Island in southern Japan, close to the city of Kumamoto on 16 April 2016. The quake claimed 137 lives and close to 2,000 people were injured. More than 8,500 buildings were destroyed, and an estimated 160,000 buildings were damaged. Economic losses were estimated to be between US$25b and US$30b, of which US$4.9b were insured.

Insured losses
“In Asia, total economic losses from all disasters more than doubled to US$83b or 48% of worldwide losses) in 2016, from US$38.5b (or 41% of worldwide losses) in 2015. Insured losses in Asia, however, increased by less than 20% year-on-year to US$8.8b, taking the total protection gap in the region to close to around US$74b (or 89% of economic losses, up from around 80% in 2015),” reports Swiss Re.

China suffered many damaging floods in 2016, but with low insurance penetration, insured losses from the 2016 floods were just US$0.4b. In China, total economic losses from all disasters stood at roughly US$40b in 2016, with close to 97% uninsured. In India, uninsured losses from all the catastrophes and man-made disasters stood at US$4.5b.