The last three years have seen a number of natural disasters rock the countries in Asia. Parts of South Asia in particular have been prone to a number of issues, including earthquakes and water disasters. The loss incurred due to these factors has amounted to billions of dollars in damage, and it is difficult for these countries to recoup these huge amounts owing to lower GDP when compared to the western part of the world.
A Look at the Status of Countries that have Suffered Natural Disasters
In the year 2013, an earthquake that ticked 7.0 on the Richter scale rocked the region of Sichuan Ya’an in China, killing nearly 200 people. Before this particular earthquake a previous one occurred in 2008 which had a significantly greater death toll.
Tsunamis have been a frequent occurrence that has caused immense loss to property and life in the South Asian countries. Apart from these, floods are also growing in frequency, and the loss of property and life is very huge in such cases. The countries of Japan, China, Thailand, India, Indonesia, Malaysia etc are those that come under this belt of vulnerable countries. They are still prone to more disasters, and the estimated loss is only on the higher side as time progresses.
Catastrophe Insurance—what is it All About?
The impact of natural catastrophes can be devastating on the potential for growth of a country. Rebuilding the base from scratch and meeting the losses that have been incurred as a result of natural disasters, is not an easy task. Government schemes have been developed to meet these needs, but they are not entirely able to cover the extent of the problem.
InvestAsian reports that most of Southeast Asia is vulnerable to earthquakes, flooding and other natural disasters like volcanoes. However, the insurance penetration rate is very low, and far from able to meeting the actual needs.
Catastrophe Insurance is provided to commercial and industrial organizations, which cover them against major natural perils. In the case of earthquakes, although it is not entirely covered, a cover for this disaster can also be obtained through endorsements. The sum insured allows the owner to build up his industry even though a natural disaster strikes and causes relevant damage to the organization and equipment. This is a major relief to the owner and workers and they have more chance of recouping their losses.
Immense Opportunity for Catastrophe Insurance Investments in Asia—an Area to be Explored Further
There are several key areas that investment agencies focus on. These include life insurance, vehicle insurance and property insurance. While property insurance protects against theft, burglary and similar problems, it often doesn’t include natural disasters and catastrophes under the purview.
In the light of the growing occurrence of natural disasters in the Southeast Asian belt, it is high time we rethought the need for this. Investasianreports that Lim Hng Kiang, Trade Minister of Singapore suggests that insurance companies focus on catastrophe insurance as the first line of defense against natures battles that cause man immense loss to property and life.