Capital markets have role to play in Asian flood risk
Friday, 09 04 2015, Category: Insurance and Reinsurance, Country: Asia
Asia has become one of the world’s most rapidly developing regions, with a burgeoning population, rising asset values and large-scale urbanisation. However, the development of the region’s economy is hindered by high exposure to flood events and a broad insurance protection gap.
Asia, and in particular parts of Southern Asia is home to some of the world’s most flood prone areas, exacerbated by a growing trend of coastal migration to low-lying communities and the establishment of more factories and industrial parks in areas susceptible to flooding.
Flood risk is not particularly well covered even in mature insurance and reinsurance markets, hence in Asia it is a peril that deserves attention. The size of the gap between economic and insured losses is something that regional observers hope can be changed with the help of reinsurance, the capital markets and insurance-linked securities (ILS).