Insurance costs may rise with flood waters
Industry reviewing exposure in flood-prone areas after recent events
Christopher Tan, Straits Times 23 Jul 10;
UNDERWRITERS are reviewing their risk exposure for properties in flood-prone areas here, and people living in or owning these properties could pay more for general insurance in future.
These areas include the Orchard Road and Scotts Road belt in the city centre, Bukit Timah in the central water catchment area, Thomson in the north, Potong Pasir in the north-east and even eastern regions such as Telok Kurau and Opera Estate.
No increase is planned - yet - say insurers, but the recent spate of floodings is causing concern in the industry.
Explaining why a review is being carried out, General Insurance Association president Derek Teo said: 'Three floods within a one-month period is unprecedented in Singapore.
'The resulting damage to vehicles trapped in the flood and property losses...is of concern to insurers, and they are monitoring the situation closely.'
The Straits Times understands that claims for damage to property and motor vehicles as a result of the three floods recently could exceed $10 million.
Mr Kua Ka Hin, the Singapore chief executive of Munich Re, one of the world's largest re-insurance groups, said that property insurance premiums are unlikely to rise if floods happen 'every five to 10 years'.
'But if it is an annual event, it will be a different consideration,' he said.
Currently, insurance coverage for property damage from floods is provided free because of the competitive market and historically low risk exposure.
That may change soon.
'Insurers could take different views in their evaluation of risks,' Mr Teo said. 'One of the rating factors which determine premium charge is the location of risk.'
In other words, insurers are likely to impose a loading or surcharge onto premiums for properties insured in areas such as Bukit Timah, Dunearn Road and certain stretches of Orchard Road.
Currently, insurance premiums on residential properties range from 0.05 per cent to 0.15per cent of sums insured. If a house is insured for $2 million, for example, its annual premium would be around $1,000 to $3,000.
Insurers contacted said that in the light of recent events, properties in flood-susceptible areas could attract a surcharge of about 10 per cent of the premiums payable.
The same loading is likely to apply to commercial buildings in flood-prone areas, industry players said.
Those in the shopping belt currently pay premiums of between 0.15 per cent and 0.25 per cent of sums insured.
A building insured for $50 million attracts a yearly premium of up to $125,000. With flood loading, it could go up to $137,500.
Mr Teo said owners of buildings such as Liat Towers, Tong Building and Lucky Plaza may have to bear the extra cost if preventive measures are not found soon.
Mr Pui Phusangmook, NTUC Income's general insurance senior vice-president, agreed that premiums for properties in flood-prone areas may increase, but added that any adjustment would 'depend on the claims history of that building or area'.
Mr Phusangmook revealed that Income had received 'more than 100 claims from the floods to date, for damage to vehicles and properties'.
But paying more for property insurance is just one side of the coin. Those living and working in flood-prone areas may also find the cost of their motor insurance rising as well.
Like buildings, flood protection for vehicles is currently included free. But industry insiders said if floods continue to be a problem, a loading of about 50cents for every $100 insured may be imposed.
For a $100,000 car, the surcharge works out to be $500 a year.
Motor premiums vary widely, depending on the driver's age, claims record and occupation, among other things.
Munich Re's Mr Kua said floods are a growing concern everywhere.
'According to our Geo Risks Research department, rainfall days have decreased worldwide, so intensity of rain has increased. Can current drainage infrastructure cope with the new intensity?' he asked.
'Also, with urbanisation, there is increased surface run-off. Looking at Orchard Road, for example, there are large tranches of land which are now covered in concrete, which previously would have allowed water to permeate naturally.'
Floods a part of life for some
But inundation last week among the worst they have experienced
Chong Zi Liang Straits Times 23 Jul 10;
WHEN operations manager Parmjit Singh arrived at Telok Kurau Secondary School last Saturday and found the carpark flooded, he was not entirely surprised.
It had happened before on June 25, when the water reached mid-calf level. But this time, it was almost knee-high, and had entered the ground-floor classrooms.
While floods are a yearly occurrence for the school, last Saturday marked the first time the water reached knee level in its 44-year history.
National water agency PUB sends an SMS flood alert to school operations managers, but nothing allegedly got through to Mr Singh. Instead, it was the school security guard who sounded the alarm.
'We got lucky with the last two floods because they happened on days when lessons were not on,' Mr Singh said of the deluge last Saturday and on June 25.
Flash floods have been part of life for residents and shop owners in areas such as Tai Seng Drive, Kampong Ampat at Macpherson and certain stretches of Upper Thomson Road. But for many, the flooding from Saturday's downpour was one of the worst they had experienced.
At the Jamiyah Children's Home, a stone's throw from Telok Kurau Secondary, wet pillows and mattresses were still drying in the sun on Tuesday.
The home for underprivileged children had been dealing with floods for the past three years.
But last Saturday, flood water entered the building for the first time. Children had to be woken early in the morning and evacuated to higher ground as water poured into their bedrooms, senior social worker Zainon Haron said.
She hopes that with the worsening flood situation, the home's planned move to new premises will be expedited.
One street away, the lingering musk of damp clothes and equipment still hung in the air at Key Power, a sports shop specialising in gear for triathletes. Owner Robert Lu estimated that last Saturday's flood cost him $200,000 in damage.
He shifted his goods to the front of the Changi Road shop as the June 25 floods hit the rear storage and office areas.
But last Saturday, the front was not spared. Bicycles, sports shoes and apparel were soaked and stained by muddy water.
Staff were airing damp gear three days later. The delivery van remained stalled outside with water still on its floor mats.
Mr Lu has has had enough. 'This is the second time I am filing an insurance claim due to flood damage. I am probably going to move to another location when I can.'
Over at Upper Thomson Road, the slip road along a row of popular shophouse eateries was raised about six months ago, and the drains were widened. Still, some outlets were hit by water at almost knee level last month, and again last Saturday.
'All the chairs and tables were washed into the shop along with rubbish from the drains. The water even reached the kitchen at the back,' said Mr Syed Rizwan, 27, a waiter at The Roti Prata House.
He has experienced flooding five times in the seven years he has worked there.
Flooding is also not new to Mr Thomas Leong, 40, branch manager of the Stamford Tyres workshop at the Kampong Ampat and Macpherson Road junction.
'We regard it as normal when we see the road flooding. The water almost comes into the shop, but so far, we have been lucky,' he said.
Members of Parliament for these areas are working with the authorities on solutions.
Mr Hri Kumar Nair, MP for the Thomson ward in Bishan-Toa Payoh GRC, said PUB has assured that drains in Thomson will be widened.
Similarly, Dr Fatimah Lateef, MP for the Geylang Serai ward in Marine Parade GRC, met PUB officials last week to discuss flood alleviation in areas such as Kampong Ampat and Tai Seng Drive.
Mr Liang Eng Hwa, MP for Zhenghua ward in Holland-Bukit Timah GRC, has arranged for residents who were affected by floods last Saturday to meet National Environment Agency and PUB officials tomorrow morning.
He said two neighbourhood committees have suggestions to upgrade drains in the area.
Wet weather spells better business for water pumps, sandbags
Lim Zhi Ying/Alvina Soh Channel NewsAsia 22 Jul 10;
SINGAPORE: Some businesses are enjoying a jump in sales due to the wet weather and fears of flooding.
Sales have been brisk for shops selling products like water pumps and sandbags.
Shop owner Alvin Chia has seen a 30 percent increase in sales of pumps.
The smaller pumps are the most popular. Each costs between $100 and $200.
The demand for sandbags has also gone up, as customers use them to protect their premises against rising water levels.
Each sandbag costs between $2 and $3.
Shop owners noted that most customers do not buy enough bags to effectively ward off the floodwaters.
They said premises like shops would need 30 to 40 bags each.
These must be stacked as tightly as possible so that there are no gaps for the water to seep through.
A sandbag of between 20 and 30 kilogrammes costs $2, while a 50kg bag costs $3.
- CNA/ir
Expect heavy rain at the weekend
Straits Times 23 Jul 10;
THERE were no reports of flooding yesterday despite rain falling in many parts of Singapore for most of the day.
But with heavy rainstorms forecast for the next few days, the authorities are bracing themselves for floods at the weekend.
National water agency PUB told The Straits Times yesterday that it has placed some 90 staff on 24-hour standby, in anticipation of any flash floods.
'PUB's contractors are also cleaning and inspecting drains around the island, with 360 contractor staff on standby, ready for activation at any time,' said a spokesman.
The National Environment Agency (NEA) said the southern parts of Singapore received the most amount of rain yesterday, with Sentosa and Orchard recording 82.2mm and 50.8mm of rain respectively.
It added that the wet conditions yesterday were due to a Sumatra squall, which developed on Wednesday night around Sumatra or the Malacca Strait, bringing thunderstorms and heavy rain.
But going into the weekend, the main concern is the effects of Typhoon Chanthu being felt here.
Chanthu hit China's south-west coast with full force yesterday, sweeping through Guangdong province and Hainan Island.
Meteorologists expect it to pick up force as it makes its way over the South China Sea.
The damp conditions have been exacerbated by the La Nina effect, associated with wetter weather, storms, droughts and cyclones, said experts.
Singapore is presently in the south-west monsoon season, which lasts until around October. The season is characterised by short, but heavy, rain periods lasting around 30 minutes.
But usually, there is less rain and warmer temperatures during this period, compared to the generally wetter and cooler north-east monsoon, which starts in December.
Sumatra squalls are also known to be common during the south-west monsoons, typically bringing gusty winds of between 40kmh and 80kmh.
AMRESH GUNASINGHAM
