Natural disasters impacting underinsurance rates: report
The ever-increasing risk of natural disasters continues to impact global underinsurance rates, particularly in Asia, according to new research by specialist insurance and reinsurance firm Lloyd's and the Centre for Economics and Business Research (CEBR).
According to Lloyd's Underinsurance Report 2018, underinsurance continues to represent a significant threat to global economic development with an estimated US$163 billion (Bt5,315 billion) of assets underinsured in the world today. In 2012, the first edition of the global report revealed US$168bn in underinsured assets globally. While the global gap has closed by almost three per cent over the last six years, the gap for Asian countries included in the report has widened by 9.4 percent to US$134 bn from US$122.5bn. At the same time, the world has seen a series of extreme weather-related catastrophes and new risks such as cyber attacks have emerged, posing additional threats to society.
Countries with more wealth stand to lose more in pure financial terms. China is the country with the highest insurance gap (US$76bn) of the 43 countries covered in the report, which is largely due to the size of its economy and the fact that the insurance market is still developing. Ninety-eight per cent of losses resulting from natural catastrophes in China between 2004 and 2017 were not covered by any type of insurance.
Of the 43 countries studied, 18 were found to have insurance gaps, with nine of these countries based in Asia.
The countries with the highest levels of insurance penetration (total insurance premiums as a percentage of GDP) in Asia are South Korea at 5.0%, Hong Kong 3.4% and Taiwan 3.4%.
