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Asia suffered S$116b losses from disasters last year, study shows

SINGAPORE — Total economic losses from natural catastrophes and man-made disasters almost doubled last year compared to the preceding year, with Asia suffering the highest damage. Globally, insured losses were also at their highest since 2012, a study from the research arm of global reinsurer Swiss Re Institute showed.

Railway workers labour to fix a Kyushu shinkansen (bullet train) after it derailed from its tracks during the recent earthquakes in Kumamoto on April 18, 2016. Photo: AFP

Railway workers labour to fix a Kyushu shinkansen (bullet train) after it derailed from its tracks during the recent earthquakes in Kumamoto on April 18, 2016. Photo: AFP

SINGAPORE — Total economic losses from natural catastrophes and man-made disasters almost doubled last year compared to the preceding year, with Asia suffering the highest damage. Globally, insured losses were also at their highest since 2012, a study from the research arm of global reinsurer Swiss Re Institute showed.

There were 327 disaster events globally in 2016, of which 191 were natural catastrophes and 136 man-made. In total, the disasters resulted in economic losses of US$175 billion (S$244 billion), almost double the US$94 billion in 2015, Swiss Re said.

The Zurich-based insurance wholesale provider also noted that Asia was worst hit in terms of the number of disaster events (128), accounting for almost half the world’s eco-nomic losses, at US$83 billion.

The earthquake on Japan’s Kyushu Island in April inflicted the heaviest economic losses, estimated to be between US$25 billion and US$30 billion, and of that amount, US$4.9 billion was insured, said the report.

Insured losses in Asia increased by less than 20 per cent year-on-year to US$8.8 billion, taking the total protection gap, or the difference between total economic losses and insured losses, in the region to around US$74 billion (or 89 per cent of economic losses, up from around 80 per cent in 2015).

In the report released yesterday, Swiss Re said insurance payouts in 2016 rose to US$54 billion, up from US$38 billion in the previous year. This was due to a high number of natural disasters, including earthquakes, storms, floods and wildfires.

Insured losses from man-made disasters were US$8 billion in 2016, down from US$10 billion in 2015.

In a separate news release yesterday, insurer AIG Singapore reported an 85 per cent increase in travel claims made for high-impact incidents — such as extreme-weather events, medical outbreaks and socio-political volatility — compared to three years ago.

High-impact incidents are the top emerging risks for local travellers over the next 12 months, AIG said. Its claims data also revealed that high-impact incidents are becoming more common and are likely to continue throughout 2017, “resulting in a 10 per cent rise in demand for premium travel products offering a greater amount of cover”.

Natural disasters are the top causes of insurance claims, with an average claim amount of S$2,610, said AIG. Depending on the circumstances of each claim and the level of cover, travellers under the classic AIG Travel Guard policy are covered up to S$500,000 for medical evacuation, while the superior and premier policies offer unlimited cover, according to the company.

AIG Singapore’s vice-president and head of group personal insurance Ignatius Chng noted: “Natural disasters are on the rise with the onset of global warming, while we continue to see more rapid disease outbreaks, such as the Zika virus epidemic in 2016. Both have detrimental effects on travellers — from delayed flights and high medical expenses, to travellers finding themselves stranded thousands of miles away from home.”

Socio-political volatility is also an emerging risk. The insurer noted that travel insurance claims relating to socio-political volatility have more than doubled over the last three years, where clients have had their travel disrupted as a result of political instability, including terrorist attacks.

Mr Chng cited the example of the coup d’etat in Burkina Faso in Africa in 2015, where AIG coordinated security specialists to keep track of its clients and their movements. It worked with teams on the ground to make alternative arrangements for policyholders in the face of flight cancellations, roadblocks and outbreaks of violence, successfully assisting 36 individuals to return home safely.

AXA Insurance’s director for lifestyle underwriting Ankush Bhardwaj agreed that there a rise in the number of clients affected by such high-impact events. He added that the insurer’s customers have successfully claimed for trip cancellation or curtailments from such events. “Utilising expert assistance services through AXA assistance, we rendered medical assistance to a client who was injured during the 2016 Nice terror attack and evacuated him back to Singapore for further treatment,” he said.

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