As Aon Benfield, released its Monthly Cat Recap report, which provides an analysis of worldwide catastrophic events in July there is a growing view that the emerging Asian markets will look at the issue of microinsurance.
The reinsurance intermediary’s Impact Forecasting team reported that the month witnessed some of the worst flood events in history, with Asia being particularly affected by the deluge.
In Pakistan, more than 1,500 people died when monsoonal rains gave rise to flooding and landslides. At least an estimated 250,000 homes were damaged or destroyed and economic losses are expected to reach hundreds of millions of dollars.
Meanwhile, China also suffered from severe rainfall and subsequent flooding around the Yangtze River, with more than 650,000 homes affected and economic losses estimated at CNY84.8 billion ($12.5 billion) solely in the month of July.
Steve Jakubowski, President of Impact Forecasting, said: “The flooding across Asia has displaced millions of people and destroyed many millions of hectares of farmland. In some cases, farming companies were reporting that 80 percent of their crops had been destroyed, which is devastating to the livelihoods of those affected and will have a significant impact on local economies, some of which rely heavily on agrarian output.”
Meanwhile, during July a severe heatwave hit Europe, causing at least 2,250 deaths, many from drowning as people took to the water to escape the high temperatures. Russia was particularly affected, where prolonged drought destroyed 10 million hectares of crops resulting in losses totaling EUR700m ($970m).
The heat sparked wildfires over many of Russia’s European areas, killing at least 40 people, injuring hundreds more and destroying around 2,210 homes. At least RUB30 billion ($1billion) had been allocated to fight the fires and rebuild destroyed areas. Initial economic damage losses were listed at RUB6.5 billion ($210 million).
The Asian floods have renewed calls from some areas of the Asian markets for greater availability for natural catastrophe cover for the population.
One reinsurance underwriter said: “The floods have increased the debate over how international insurers and reinsurers are participating in the market. There has long been a view that if the industry wants to underwrite the commercial risks they need to provide capacity for the natural peril risks and that means micro insurance to the millions of people who have a very low income.
“There are a number of programmes already in place and there is little doubt there will be more in the future as government and regulators look to provide insurance for those perils.”