Yemisi Izuora/Agency Report
Asian countries are reportedly among the most exposed and least resilient to natural disasters in the world, but as a result of underinsurance in emerging markets and low losses in Europe and the US, global disaster losses were below average in 2015, according to two new reports.
Risk consultant Verisk Maplecroft has highlighted a lack of resilience to hazards in emerging markets, especially in Asia.
Research from the firm found that India, China and Bangladesh are the three most exposed countries to natural disasters, followed by Nigeria, Indonesia, the Philippines, US, Japan, Brazil and Pakistan.
The 10 cities with the most exposed populations are Manila, Tokyo, Jakarta, Dongguan, Bangladesh, Kolkata, Osaka, Mexico City, Delhi and Sao Paolo, according to Verisk.
Investors and business in India, Pakistan, Bangladesh and the Philippines are particularly exposed because governments in these countries have struggled to translate economic growth into improved resilience.
Verisk believes that as many as 1.4 billion people in South Asia – representing 85 percent of the region’s total population – are acutely exposed to natural hazards, including flooding, earthquakes and tropical cyclones.
South Asian nations lag behind the world’s leading economies when it comes to mitigating the worst impacts of natural hazards. Verisk’s Natural Hazards Vulnerability Index rates Japan and the US as low risk and China as medium risk.
“This data highlights the scale of the task facing governments and business in mitigating the threats to populations and workforces from natural hazards in these high risk regions,” said James Allan, director of environment at Verisk Maplecroft.
“With overseas investment pouring into the emerging Asian markets, companies have an increasing responsibility to understand their exposure and work with governments to build resilience,” he said.
Verisk’s findings were supported by the latest catastrophe statistics from reinsurer Swiss Re’s sigma unit. Its annual review of global disasters found that the Asian region reported the biggest loss of life and economic damage in 2015.
In all, there were around 19,000 victims of disasters in Asia during 2015 with economic losses at $38bn. Only $7bn was insured. This compares to 26,000 deaths worldwide last year and total economic losses of $92bn.
The earthquake in Nepal was the biggest disaster of 2015 in economic-loss terms, estimated at $6bn.
Overall worldwide losses of $92bn were well below the inflation-adjusted average of $192bn for the previous 10 years. Global insured losses from disasters totalled just $37bn in 2015, compared with the 10-year annual average of $62bn, according to Swiss Re.
The losses reflected low levels of US hurricane activity. 2015 was the tenth year without a US hurricane making landfall.
“The relatively low level of losses was largely due to another benign hurricane season in the US. El Niño in 2015 contributed to weather patterns deviating from average climate norms,” Swiss Re said in the sigma study.
Despite the low level of insured losses, there were 353 disaster events in 2015, of which 198 were natural catastrophes, the highest ever recorded in one year.
In Europe, natural catastrophes and man-made disasters caused total losses of $13bn in 2015, of which $6bn were insured.
The main losses were caused by flooding, including storms that hit the UK and France.
According to Swiss Re, there were 155 man-made disasters in 2015, compared with 148 in 2014. However, the number of man-made loss events has been declining since its 2015 peak of 257.
Man-made disasters cost insurers $9bn in 2015. Such losses have gradually increased from $6.6bn in 2005.
Large fires losses were the biggest cause of man-made loss in 2015, costing insurers $5.6bn, with industrial and energy losses accounting for $3.9bn and $1.6bn respectively.
