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Insured losses from typhoon Chan-hom unlikely to exceed about US$354 million: AIR Worldwide


July 16, 2015   by Canadian Underwriter


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Catastrophe modelling firm AIR Worldwide said that insured losses in China from typhoon Chan-hom are unlikely to exceed CNY (Chinese Yuan Renminbi) 2.2 billion, or about US$354.4 million.

A rescue personnel carries a child as he and his colleagues help local residents to get to a safe area along a flooded street amidst heavy rainfall caused by Typhoon Chan-hom, in Shaoxing, Zhejiang province, China, July 11, 2015. REUTERS/China Daily

Typhoon Chan-hom made landfall in the coastal city of Zhoushan, China – about 130 kilometres south-southeast of Shanghai – on July 11 as a Category 2 storm, making it one of the strongest to hit the region this year, said Dr. Kevin Hill, senior scientist at AIR Worldwide, in a press release. “At the time of landfall, maximum sustained winds reached 45 metres per second (m/s) with a central pressure of 960 millibars (mb), which was slightly less intense than its peak strength of 935 mb 24 hours prior. Some reports suggest this could be the strongest July typhoon to hit Zhejiang Province since 1949.”

According to official estimates released on Wednesday by the Zhejiang government, economic losses in the province alone are estimated at CNY 8.86 billion (about US$1.4 billion), AIR Worldwide reported. More than 1,000 houses are reported to have collapsed in China and the agriculture and transportation industries appear to be the most affected, with reports of more than 200,000 hectares of farmland affected. Thousands of flights and trains were cancelled due to the weather conditions.

The storm affected 2.8 million people in 520 villages and towns, spanning 69 counties and nine cities of Zhejiang Province. The catastrophe modelling firm reported that evacuations prior to landfall included about 1.2 million people from coastal areas of Zhejiang and more than 56,000 in neighbouring Jiangsu.

Chan-hom was moving north-northeast at a rate of 20 km/h when it glanced the coast of China, moving through Shandong Province on July 12 and then quickly swerving out to the Yellow Sea. It then made a second landfall in North Korea as a tropical storm after weakening due to significantly cooler sea surface temperatures, AIR Worldwide reported. Sustained wind speeds in North Korea were reported between 80 km/h and 88 km/h.

A wave, under the influence of Typhoon Chan-hom, hits the shore next to residential buildings in Wenling, Zhejiang province, China, July 10, 2015. REUTERS/Stringer

“Heavy downpours doused Shanghai and the provinces of Anhui and Fujian, flooding roads and fields,” Dr. Hill reported. The China Meteorological Administration reported close to 40 cm of precipitation in the city of Lai’ao Village in Sanmen County, south of Shanghai. Landslides also washed away more than 5,000 cubic meters of land in Ningbo city, and dozens of water gates have been opened to facilitate flood drainage.

Regarding AIR Worldwide’s insured loss estimates, the estimates include insured physical damage to onshore property (residential, commercial, and construction all risks/erection all risks) for both structures and their contents due to wind and precipitation-induced flooding in China. The estimates also include take-up rates — that is, the percentage of properties in China that are actually covered against wind and flood damage. “Note, however, that there is considerable uncertainty around these take-up rates,” the modelling firm cautioned.

The modelled insured loss estimates do not include:

• Losses to uninsured properties, infrastructure, crops, livestock and poultry and auto;

• Losses from storm surge or from hazardous waste cleanup, vandalism or civil commotion, whether directly or indirectly caused by the event;

• Losses resulting from physical failure of flood defences;

• Builders risk;

• Demand surge; and

• Other non-modelled losses


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