Asia and Australasia also received their share of both natural and man-made catastrophes in 2013. One of the most costly man-made events occurred in China after a major fire hit a large microchip factory in September. The blaze caused significant damage to the SK Hynix-owned facility in the city of Wuxi, with reports saying the cost to the (re)insurance sector is expected to range between USD900 million and USD1 billion. The incident represents the most expensive single-risk loss on record to occur in China.
Posts Tagged ‘Asia’
Guy Carpenter & Company released its 2013 Catastrophe Review, which shows that natural catastrophes and man-made disasters in 2013 resulted in insured losses of approximately $40 billion. Following above-average losses experienced in 2011 and 2012, 2013 provided a respite for the (re)insurance industry as insured losses were considerably less than the ten-year average of approximately $60 billion.
The chart shows that growth in reinsurance catastrophe limit in the Asia Pacific region has clearly not kept pace with economic growth since 2006. Stronger rates of economic growth in such emerging markets mean the gap between economic and insured losses has the potential to increase further. Continue reading…
Super Typhoon Haiyan meets or surpasses the record of the strongest landfalling tropical cyclone in recorded history, and is among the strongest ever recorded. Haiyan made landfall during the early morning hours of November 8 near Guiuan, with estimated 1-minute wind speeds of 185-195 mph (300-315 km/hr). While it is still too early to fully assess impacts to the area, severe to complete wind damage is a near certainty adjacent to the storm track, with wave battering and water velocity damage most severe within 20 miles (32 km) of the storm track.
Guy Carpenter Extends Coverage of Industrial Park Database to Include Vietnam, Malaysia and South Korea
In 2011, Thailand experienced its worst flooding in years with insured losses estimated at around USD15 billion,(1) of which the Thai General Insurance Association attributed more than 90 percent arising from commercial risks located within industrial parks. As industrial parks are common in several countries in the region, Guy Carpenter developed a database of digitized boundaries of these parks to support its clients’ ability to analyze the potential for catastrophic losses arising from exposures located within park boundaries.
The Tohoku rupture of 2011 changed the market’s understanding of seismic risk in Japan. The Mw 9.0 event occurred in an area where earthquakes of up to only Mw 8.4 were thought possible. Following the event there was increased publicity surrounding the so-called Tokyo Fragment theory and discussion around the potentially increased probability of earthquakes near Tokyo.
The hazard of greatest concern under global warming is coastal flooding. According to the IPCC, a sea-level rise of at least one to two feet (25 to 50 centimeters) can be expected by the end of the century (with the understanding that a wide range of sea-level rise scenarios exist). This is of great significance for all coastal cities and communities. This is of even greater significance to fishing and agriculture communities located on the Asian coasts, many of which are situated on low-lying and flat geographical areas. The recent consequences of Cyclone Nilam for Eastern India and the impacts of Sandy (2012) for the coastal United States are grave examples of such impacts, and under sea-level rise, such impacts will come with greater frequency and severity. Tropical cyclone, extratropical cyclone and tsunami coastal impacts will all come with greater frequency and severity under the projected sea-level rise. This poses a significant human and economic concern for these areas, and is a significant concern to the (re)insurance industry.
Here we bring together recent GC Capital Ideas stories focused on the growth opportunities afforded by emerging markets.
Guy Carpenter reports that dynamic capital growth and ample reinsurance capacity resulted in a relatively stable renewal at April 1, 2013. In a briefing released today, Guy Carpenter comments that the convergence of traditional and alternative capital sources is changing the marketplace, with non-traditional capacity now making up an estimated 14 percent of global property catastrophe limit.
Here we review the recent GC Capital Ideas stories that have dealt with supply chain risk.
Contingent Business Interruption: Life Support for Industry: the insurance industry contemplates the concept of supply chain risk, questioning whether it is a threat or an opportunity. The industry is undecided whether CBI coverage should be enthusiastically marketed as a positive differentiator or consigned to the “accommodation business” category.
Global Losses of 2011 Changed the Perception of Risk: Over the last few years, the global (re)insurance sector has seen significant increases in cold spot catastrophe losses. This growing trend refers to exposures in territories that have historically been considered non-peak zones and are unmodeled or inadequately modeled. It is also a by-product of the increasingly global economy in which (re)insurers operate and the growing demand for (re)insurance in emerging and developing territories.
Thailand Flood 2011: Executive Summary: In 2011, Thailand experienced its worst flooding in years, leaving more than 800 people dead and causing severe damage across northern and central regions of the country. The floods, lasting a few months, severely damaged and disrupted manufacturing operations in Thailand.
Guy Carpenter Asia Pacific Catastrophe Report 2012; Executive Summary: The Thai floods emphasized the need not only to understand asset concentrations better but also the fragility of global supply chains. Not only were these property damage losses modeled on a rudimentary basis if at all, but business interruption losses and supply chain disruption were completely unmodeled.
Global Perils: The Tohoku earthquake/tsunami and the Thai floods revealed risks that (re)insurers had not previously considered, with CBI claims - resulting from supply chain failure - accounting for a large share of insured losses.