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The Actuary The magazine of the Institute & Faculty of Actuaries
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Lack of insurance ‘means Asian cyclones put strain on governments’

Low levels of insurance and reinsurance penetration in Southeast Asia and the South Pacific mean the extreme weather both regions experienced last month will place a major strain on the availability of government aid, Aon Benfield said yesterday.


08 JAN 2013 | THE ACTUARY NEWSDESK: NICK MANN

In its latest Global catastrophe recap report, the reinsurer’s catastrophe modelling subsidiary Impact Forecasting details how Super Typhoon Bopha killed 1,901 people and injured 2,666 others after making landfall on the southern Philippine island of Mindanao as a category 5 typhoon last month.

Bopha damaged or destroyed more than 216,000 homes with economic losses to agriculture, infrastructure and private property recorded at $802m. An additional $122m was allocated to the rehabilitation of farms, it noted.

Last month also saw the Philippines being hit by Tropical Storm Wukong which left at least 24 people dead or missing and reported losses to agriculture and infrastructure of $5.5m.

In the South Pacific, Cyclone Evan crossed the Samoan Islands, Fiji, Tonga and other smaller islands, killing at least 14 people. In Samoa it caused extensive damage along coastal areas, leaving total economic losses worth an estimated $133m, while economic losses in Fiji were estimated at $8.4m.

Steve Jakubowski, president of Impact Forecasting, said: ‘The cyclonic weather that Southeast Asia and the South Pacific experienced during December has had a devastating effect on local populations.

‘Insurance and reinsurance penetration in the affected territories is significantly lower than in the more mature western markets, so the impact of a weather system such as Super Typhoon Bopha on the Philippines places an even greater strain on regional recovery efforts and the availability of sufficient government aid.’

Yesterday’s report also highlights winter storms which impacted on the US and parts of Europe in December. The US saw heavy accumulating snowfall in The Plains, Midwest, Northeast and Mid-Atlantic states, leading to major travel delays.

More than 15 central and eastern European countries were hit by severe winter weather conditions, which left at least 277 people dead. The weather also caused widespread damage, the closure of hundreds of roads, and the cancellation of flights and shipments along the Danube River after certain stretches became frozen.