China has experienced its worst floods since the supposedly one in 100 years flooding of 1998, but damage to crops has reduced, Aon Benfield has said.
The firm, the global reinsurance intermediary and capital advisor of Aon plc has issued its Natural Catastrophe Report for China in Summer 2016, when, as in 1998, the country suffered the effects of a 'super El Niño' flood.
It said that at least 130,000 claims related to storm and flood have been reported following this summer's floods in the Yangtze river area and the north and north east of China.
Based on government statistics, economic losses will exceed 255.8bn yuan, while Aon Benfield estimates total insurance loss to reach more than 4bn yuan.
It said 4bn yuan was estimated to be approximately 1.5% of total economic loss, reflecting the low level of insurance penetration.
Despite similar hazard patterns, the impact of the flooding had decreased significantly since 1998, with 68% fewer crops damaged as the Yangtze dam did not break this summer.
The Chinese government has since 1998 increased investment in flood forecast and control, and improved defence systems.
Yifan Fu, head of Aon Benfield Analytics Greater China, said: "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."