Catastrophe modeler Eqecat says the insured losses from Typhoon Haiyan are likely not to exceed $100 million despite the storm possibly being the deadliest to ever hit the Philippines.
Although damage is extensive to the most affected parts of the island country, much of the areas are less urbanized and insurance penetration is low, reports Eqecat. About 90 percent of infrastructure is damaged but this is also not typically insured. Eqecat says only about 15-20 of property insurance policies, of the low percentage with them, are insured against typhoon risk. Standard homeowners policies exclude flood coverage.
Haiyan was a Category 5 to 4 typhoon with sustained winds of 190-plus mph as it went over the Visayan Islands before hitting Vietnam and China as a weaker storm. Insured losses in these countries are expected to be minimal, says the modeler.
According to A.M. Best, another preliminary estimate put economic losses at $14 billion and insured losses at $2 billion.
The insurance rating agency says losses from Haiyan, known as Yolanda in the Philippines, are not expected to exhaust the reinsurance capacity in place. Insured losses will be spread over many segments, including personal lines, fire & property, and marine hull.
A.M. Best says it “believes the frequent and intense natural catastrophes in the Philippines this year will accelerate the discussion of a natural catastrophe scheme and micro insurance in the country.”
Eqecat adds there is a chance of a of “high-value, single-facility insured loss” from the mammoth storm. The province of Cebu is the most populated in the Visayan Islands and is the furniture capital of the country, says Eqecat. Other exports include light manufacturing.
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