Insurance News Net 12 Aug 10;
Singapore's nonlife insurance industry paid S$22.9 million (US$16.8 million) in claims related to three severe floods in the central business district caused by heavy rains in June and July, according to the General Insurance Association of Singapore.
The large amount of insured loss and risk exposure to floods may lead to a rise in nonlife premium rates. "If these floods persist, and there is a corresponding damage to properties and vehicles, we are likely to see an impact on premiums, especially for those places and localities frequently affected," said a GIA spokesperson.
Of the S$22.9 million in claims paid by about 20 insurers, motor insurance claims amounted S$11.6 million and S$11.3 million was paid for property damage and business interruption.
There were 428 claims for motor insurance and 440 for property and business losses from both commercial and individual segments which were affected by the two floods in June and one in July.
Singapore's nonlife insurance penetration [premiums as a percentage of gross domestic product] was 1.7% in 2009, compared to the global average of 3%, according to Swiss Re's sigma report.
Heavy rain, which was more than 60% of the average monthly rainfall amount, led to flooding in many buildings, shops and basement car parks. Singapore's central Orchard Road and Scotts Road areas were worst hit by the floods, making roads impassable to cars. The type of flash flood seen in these storms was unusual in Singapore, according GIA's spokesperson.
Singapore's nonlife insurance industry reported total net premiums of S$2.24 billion in 2009, down from S$2.32 billion a year earlier. The incurred loss ratio stood at 56% in 2009, down from 58% in 2008, according to the Monetary Authority of Singapore. Motor insurance had a loss ratio of 75% in 2009, which was highest among nonlife lines.
(By Iris Lai, Hong Kong bureau manager: Iris.Lai@ambest.com)
