Chinese flooding causes $52-billion loss, only 1%-2% of which is insured

Flooding in China during the summer of 2010 – the worst since 1998 – resulted in an estimated $52-billion economic loss, but insured losses are only approximately 1% or 2% of that total, Guy Carpenter reports.
Twenty-five rivers in China flooded during the summer months, triggered by an unusually severe monsoon season, Guy Carpenter reported in its Capital Ideas.
Due to low insurance penetration levels, the estimated insured loss is estimated to be between $520 million and $1.04 billion.
“While varying from treaty to treaty, the impact on the majority of non-marine proportional reinsurance treaties is expected to be limited,” Guy Carpenter reported.
“Only a limited number of catastrophe excess of loss reinsurance treaties is expected to be affected, with 2010 flood losses impacting only the bottom layer.”