It suffered US$74b in total losses last year but only US$2b insured
Melissa Tan Straits Times 21 Sep 11;
ASIA is not insured enough against natural disasters despite the region suffering more catastrophes than other parts of the world, said a Monetary Authority of Singapore (MAS) official yesterday.
Mr Ng Nam Sin, the assistant managing director (development group), told a conference that Asia was the victim of half the world's natural disasters last year.
He noted that the region accounted for 35 per cent of the US$210 billion (S$265.4 billion) in total economic losses from natural and man-made disasters last year, or around US$73.5 billion.
But the total amount of insured losses in Asia last year was about US$2 billion.
Insured losses refer to economic losses that are covered by insurance.
Mr Ng cited the example of the earthquake and tsunami in Japan in March to illustrate the size of the gap between insured losses and total losses.
Total losses from the Japan disasters came to between US$200 billion and US$300 billion, but insured losses totalled US$15 billion to US$30 billion.
Asia faces extra threat from natural disasters due to the fact that several countries are located along the Pacific Rim of Fire, an earthquake-prone zone.
He noted that it is also the region with a rapidly increasing number of large cities, adding that these factors mean managing the risk of natural disasters was 'one of Asia's biggest challenges'.
Mr Ng, who was speaking at a conference on financial risk management of natural catastrophes in Asia Pacific, asked insurers to form more public-private partnerships to solve the problem of Asia's under-insurance.
He also called for more affordable protection plans especially for the poor.
'The less affluent population... is more exposed to the impact of natural catastrophes, given (their) lower financial preparedness and higher dependency on agriculture,' he said.
Mr Ng added that insurers should work to raise awareness of natural disaster risks and improve their risk modelling capabilities.
The conference at the AXA University Asia Pacific Campus was organised by insurance firm AXA and insurance broker AON.
