A gap remains bet88 kèo natural disaster insurance

Typhoon Yagi made landfall bet88 kèo Vietnam on September 7, marking the strongest typhoon bet88 kèo Asia this year and the worst storm Vietnam has experienced bet88 kèo decades. It hit key northern economic hubs such as Hanoi, Hai Phong city, and Quang Ninh, Hai Duong, and Hung Yen provinces, where numerous industrial parks and major domestic and international businesses are located. The storm’s aftermath led to widespread flooding across nearly all northern provinces, causing substantial damage to lives, property, agriculture, and infrastructure.

Analysts report that global economic losses due to natural disasters have surged over the past 6-7 years, reaching 0 billion bet88 kèo 2023. However, 38 per cent of these losses were covered by insurance, which plays a crucial role bet88 kèo disaster recovery efforts. Due to relatively low insurance coverage bet88 kèo Vietnam, however, insured losses from the storm are likely to be significantly lower than total economic losses.

Efforts to assess damage

Immediately after the storm passed, on September 9, the Insurance Supervisory Authority at the Ministry of Finance (MoF) issued an official notice to the Insurance Association of Vietnam (IAV) and insurance companies, urging them to work proactively with relevant agencies, organizations, and individuals to assess losses. The notice also called for immediate compensation advances and swift, complete insurance payouts to policyholders and beneficiaries as per contract agreements and legal requirements. bet88 kèo addition, the IAV and insurance companies were asked to provide humanitarian aid to those affected by the typhoon.

Reports indicate that insurance companies responded quickly, reaching the affected areas to promptly assess losses, advance compensation payments, and settle claims. This helped policyholders recover from the disaster more quickly and resume normal life, production, and business operations.

According to Mr. Ngo Trung Dung, Deputy Secretary General of the IAV, the majority of insurance payouts after Typhoon Yagi were related to damage caused by cars being crushed by trees or submerged bet88 kèo floods, as well as damage to properties bet88 kèo industrial parks. These customers are typically more proactive bet88 kèo mitigating property damage risks.

However, many small business owners were severely impacted, with some losing all their assets bet88 kèo the disaster. Unfortunately, small business owners are not accustomed to managing risks through insurance, meaning they often don’t qualify for coverage when losses occur.

Additionally, many apartment buildings and homes bet88 kèo Vietnam’s north sustained significant damage from the storm. However, like small business owners, insurance company executives noted that very few people purchase storm or flood insurance for their homes or apartments.

A 2022 survey by Peak Re, a reinsurance company based bet88 kèo Hong Kong (China), on respondents bet88 kèo countries such as China, India, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, found that when large-scale risks seriously affect the health and finances of insured individuals, consumers tend to bear the bulk of the costs rather than being protected by insurance. This aligns with the current situation bet88 kèo Vietnam, where, aside from compulsory insurance products mandated by the MoF, such as mandatory fire and explosion insurance or motor vehicle civil liability insurance, most other insurance products face challenges bet88 kèo gaining widespread adoption.

According to Swiss reinsurance provider Swiss Re, global economic losses due to natural disasters bet88 kèo 2023 reached 0 billion, with approximately 8 billion of those being insured, accounting for about 38 per cent of the total economic impact. Data from international reinsurers indicate that annual insured losses from natural disasters exceeding 0 billion have become the “new normal” over the past five years. bet88 kèo fact, 2023 marked the sixth year out of the last seven where average insured losses from natural disasters surpassed 0 billion.

Significantly, the number of natural disasters leading to insured losses hit an all-time high bet88 kèo this period, with 142 out of 218 recorded events causing such losses. Of these, around 140 were medium to small-scale disasters, contributing to insured losses of over billion.

The types of assets most vulnerable bet88 kèo these situations cover a wide range, including crops, motor vehicles, buildings, solar power systems, and rooftop solar installations.

As natural disasters become increasingly unpredictable and severe, warnings about the effects of climate change continue to grow, especially for countries bet88 kèo Asia, which are highly susceptible. A series of recent extreme weather events also caused severe flooding bet88 kèo Middle Eastern countries like the UAE, Oman, Bahrain, and Qatar.

“Severe thunderstorms have emerged as a main driver of a significant increase bet88 kèo insured losses bet88 kèo recent years,” said Mr. Balz Grollimund, Head of Catastrophe Perils at Swiss Re. “This is due to growing populations and higher property values bet88 kèo urban areas, along with insured property being more vulnerable to hail damage.”

Budget burden

For Vietnam’s insurance sector, while there were no major natural disasters causing significant losses to businesses between 2021 and 2023, experts continue to warn that Vietnam remains one of the most disaster-prone countries.

During the National Conference on Natural Disaster Prevention and Control, Search, and Rescue bet88 kèo 2024, held on May 10, experts forecast that 2024 would see more extreme weather events. This includes above-average occurrences of heatwaves, droughts, saltwater intrusion, thunderstorms, and hailstorms bet88 kèo the first half of the year, followed by increased rain, storms, floods, and inundations bet88 kèo the latter half. By early 2024, 72 hailstorms had already been recorded, and the average temperatures across the country during the first four months of the year were 0.5 to 1.5C higher than usual. Notably, bet88 kèo April, the northern and north-central regions experienced temperatures that were 3.1 to 3.6C above the norm.

Four months later, on September 7, Super Typhoon Yagi struck Vietnam, and it won’t be the final storm of the year. Between September 7 and 12, the death toll and property damage surged with each official update as rain and flooding persisted.

However, according to a report by credit ratings agency AM Best on the impact of Typhoon Yagi on Vietnam’s insurance industry, released on September 12, the low insurance penetration rate bet88 kèo Vietnam means that insured losses will likely fall far short of total economic losses.

bet88 kèo Vietnam, the insurance premium-to-GDP ratio is just 2-3 per cent, with non-life insurance representing less than 1 per cent. Though this is higher than Indonesia’s ratio, it still lags significantly behind other regional countries. This gap indicates that the financial strain of post-disaster recovery remains substantial, placing heavy pressure on the national budget.

“The insurance sector, particularly life insurance, is often likened to a handrail,” said Mr. Dau Anh Tuan, Vice Secretary General and Director of the Legal Department at the Vietnam Chamber of Commerce and Industry (VCCI). “While we can still climb stairs without one, having a handrail makes it much safer and more reassuring.”

Experts argue that risks are unpredictable, and waiting for disasters to occur before recognizing the importance of insurance as a “lifeline” is too late. Insurance allows for the transfer of risk, distribution of losses, and reduction of damage. It also helps stabilize costs, providing policyholders with peace of mind and encouraging savings. Therefore, regulatory bodies need to implement more strategies to increase insurance penetration relative to GDP bet88 kèo order to better prepare for the rising and increasingly unpredictable threat of natural disasters.