Catastrophe Insurance Policy for China
The vast majority of China's population lies to the southeast of a line running from Beijing to Sichuan. This entire region is subjected to major floods each year, while typhoons affect the southern and eastern coastal areas and major earthqua...
| Main Author: | |
|---|---|
| Format: | Publications & Research |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2010/12/13337567/catastrophe-insurance-policy-china http://hdl.handle.net/10986/10127 |
| Summary: | The vast majority of China's
population lies to the southeast of a line running from
Beijing to Sichuan. This entire region is subjected to major
floods each year, while typhoons affect the southern and
eastern coastal areas and major earthquakes affect the
western and northern margins. The average annual direct
property damage is estimated at approximately USD 15
billion, and when combined with other immediate economic
losses, including business interruption, disaster relief,
and other costs, is considerably larger. As with other
sectors, insurance in China is growing rapidly, with a
compounded annual growth rate of 25 percent since 2001. The
property insurance industry, nevertheless, is
underdeveloped. Total property premiums in China are about
USD 15 billion, whereas the losses from the Wenchuan
earthquake alone are likely to exceed USD 100 billion.
According to most estimates, only 5 percent of property in
China is insured, primarily among commercial and industrial
users. When it comes to private dwellings, it is estimated
that today only 1 out of 100 is insured against natural
hazards. Clearly, the current property insurance market in
China is dwarfed by the nation's need for catastrophe
risk protection; at the present level of insurance
penetration, China's insurance industry cannot provide
significant compensation for large natural hazards losses. |
|---|