Just 2% of China’s July Floods Covered by Insurance, vs. Nearly 70% in U.S.: Aon

China’s seasonal “Mei-Yu” rainfall in July led to the worst flooding since 1998, bringing total combined economic losses of an estimated US$33 billion, according to a report published by Impact Forecasting, Aon Benfield’s catastrophe model development team.

Affecting the Yangtze River Basin and the country’s northeast, the floods have damaged an estimated 18 million acres of cropland and nearly 20 provincial regions – in some areas since the month of May.

Data from China’s Ministry of Civil Affairs indicated that a combined 764 people were left dead or missing, and more than 800,000 homes and other structures were damaged or destroyed, said the Impact Forecasting report titled “Global Catastrophe Recap – July 2016.”

At least $28 billion of the total combined economic losses (of the overall economic toll of $33 billion) occurred in the Yangtze River Basin, the report said.

Insurance claims payouts represented less than 2.0 percent of the economic cost with most claims coming from lost agriculture, said Impact Forecasting, quoting statistics issued by the China Insurance Regulatory Commission.

Adam Podlaha, global head of Impact Forecasting, said: “While it was expected that China would see above normal rainfall during the peak monsoon months with such a strong El Niño, the intensity and scope of what transpired from the associated floods were at a magnitude not seen in nearly two decades.”

U.S. Losses

Meanwhile, the United States recorded six separate outbreaks of severe convective storms and flash flooding from the Rockies to the East Coast, bringing total combined economic losses of an estimated at US$1.5 billion, Impact Forecasting said.

In comparison to the floods in China, public and private insurers were anticipated to record losses, nearing US$1.0 billion, or 67 percent of overall economic costs.

Many of the storms were spawned by an extended period of very hot and humid conditions that led to a “Ring of Fire” thunderstorm pattern, which also contributed to elevated thunderstorm and flood activity and damage in Canada’s provinces of Alberta, Saskatchewan, Manitoba, Ontario, and Quebec, the report added.

Total combined economic and insured losses in Canada were expected to exceed US$100 million once all assessments are completed.

Events to have occurred elsewhere during the month of July include:

• Monsoon rains also led to extensive flood damage elsewhere in Asia. More than 230 people were left dead or missing in India, Nepal, Pakistan, Indonesia and Afghanistan as tens of thousands of homes were destroyed.
• Super Typhoon Nepartak claimed 82 lives as it made separate landfalls in Taiwan and China. Though not officially coming ashore, its outer bands lashed northern portions of the Philippines. The heaviest damage was noted in Taiwan and China, where at least 38,000 homes were damaged or destroyed. Combined economic losses were at least US$1.5 billion.
• Severe thunderstorms and flash flooding left considerable damage across parts of South Africa, killing at least seven people. The local insurance industry anticipated insured losses exceeding ZAR2.0 billion (US$145 million). Overall economic losses were much higher.
• Tropical Storm Mirinae made separate landfalls in southern China and northern Vietnam, leaving at least five people dead or missing. The storm left more than 2,000 homes and 110,000 hectares (272,000 acres) of cropland damaged or destroyed. Total combined economic losses were listed at USD20 million.
• The Sand Fire was ignited in California, charring more than 41,432 acres (16,770 hectares) of land. Two people were killed as the fire damaged or destroyed more than 140 homes and other structures.

Source: Aon Benfield/Impact Forecasting

Topics USA Profit Loss Flood China Aon