Insurance on Catastrophic risk
Catastrophe Insurance in Asia
-- Illustrated by 2011 Thai Flood
Content Page
1. Introduction
Catastrophes have become a rising concern all over the world. Natural catastrophes have been rising exponentially over the century while man-made catastrophes such as terrorism are alarming as well. The increasing losses caused by catastrophes have proved their devastating impacts on humans.
In this report, our group will take a closer look at catastrophe insurance. We will begin with defining catastrophic risks in the general context and then proceed to disclosing the trends and pricing model of catastrophe insurance, and finally examine other related products in the catastrophe insurance market. To ensure that our report is more focused, we will limit our analysis to natural catastrophic risks and insurance in Asia, using 2011 Thai flood case as an illustration.
2. Thai Flood (2011) Case in a Nutshell
In 2011, Thailand experienced the worst series of floods in at least 5 decades. The most devastating one occurred between late July and early December. In total, as many as 10 million people were affected to some extent by the flood across 65 of the country’s 77 provinces. The damage was widespread and severe in many locations. Economic losses were US$45.7 billion estimated by the World Bank, which made the floods one of the top five most expensive natural disasters in modern history.
Amongst these losses, total losses to households were around US$2.7 billion; overall economic losses by national manufacturing sectors, including business interruptions, were US$32.5 billion; costs of repairing roadways and airports amounted to US$4.5 billion and US$4.8 million respectively; losses to the agricultural sector was US$2.4 billion. The losses on the business and economy were disastrous. Picture Source: National Geographic; Framework LAtimes; healthspaceasia
3. Catastrophic Risk
3.1. General Definition and
-- Illustrated by 2011 Thai Flood
Content Page
1. Introduction
Catastrophes have become a rising concern all over the world. Natural catastrophes have been rising exponentially over the century while man-made catastrophes such as terrorism are alarming as well. The increasing losses caused by catastrophes have proved their devastating impacts on humans.
In this report, our group will take a closer look at catastrophe insurance. We will begin with defining catastrophic risks in the general context and then proceed to disclosing the trends and pricing model of catastrophe insurance, and finally examine other related products in the catastrophe insurance market. To ensure that our report is more focused, we will limit our analysis to natural catastrophic risks and insurance in Asia, using 2011 Thai flood case as an illustration.
2. Thai Flood (2011) Case in a Nutshell
In 2011, Thailand experienced the worst series of floods in at least 5 decades. The most devastating one occurred between late July and early December. In total, as many as 10 million people were affected to some extent by the flood across 65 of the country’s 77 provinces. The damage was widespread and severe in many locations. Economic losses were US$45.7 billion estimated by the World Bank, which made the floods one of the top five most expensive natural disasters in modern history.
Amongst these losses, total losses to households were around US$2.7 billion; overall economic losses by national manufacturing sectors, including business interruptions, were US$32.5 billion; costs of repairing roadways and airports amounted to US$4.5 billion and US$4.8 million respectively; losses to the agricultural sector was US$2.4 billion. The losses on the business and economy were disastrous. Picture Source: National Geographic; Framework LAtimes; healthspaceasia
3. Catastrophic Risk
3.1. General Definition and
Bibliography: AON BENEFIELD. (2012). 2011 Thailand Floods Event Recap Report. AON BENEFIELD. Asian Development Bank. (2009). Natural Catastrophe Risk Insurance Mechanisms for Asia and the Pacific. Asian Development Bank. Banks, E. (2005). Catastrophic Risk Analysis and Management. WILEYFINANCE. Lee, J. (2013, April 25). Asia-based cat bond issuance unlikely. Retrieved October 25, 2013, from Risk.net: http://www.risk.net/asia-risk/news/2263632/asia-based-cat-bond-issuance-unlikely Nguyen, T OECD. (2005). Catastrophic Risks and Insurance. OECDPublishing. Office of Insurance Commission. (2012). National Catastrophe Insurance Fund 2012. Orie, M., & Stahel, W Reinsurance in Asia will enjoy rapid growth. (2013, August 7). Retrieved October 23, 2013, from Intelligent Insurer: http://www.intelligentinsurer.com/news/reinsurance-in-asia-will-enjoy-rapid-growth Subprasom, C Swiss Re. (2012, December 14). Cat bond market can expand with new perils and regions: Swiss Re. Retrieved October 25, 2013, from ARTEMIS: http://www.artemis.bm/blog/2012/12/14/cat-bond-market-can-expand-with-new-perils-and-regions-swiss-re/ The Economist