- Insurance covers 10% of China's natural disaster losses vs 30%-40% globally
- Extreme weather events increasing in China
- Catastrophe insurance still in early stages in China
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Many local governments in China, especially those in typhoon-prone areas, have embraced such insurance, but regulators and experts say more needs to be done after losses in under-protected Henan swelled to 133.7 billion yuan ($20.64 billion), or 4.6% of its first-half gross domestic product, due to the floods last month.
Globally, insurance covers 30%-40% of economic losses from disasters, with coverage up to 60% in North America. In China, where local experts warn of more extreme weather due to global warming, coverage is just 10%, according to Swiss Re.
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In China, catastrophe insurance is still in its infancy, partly due to a lack of a central government push. In China's 2021-2025 economic and social development plan, catastrophe insurance was briefly mentioned without elaboration.
Disaster insurance coverage in China is also highly dependent on local authorities, which may not necessarily be warm to the idea since they would have to pay for such policies out of their own pockets, unlike in advanced economies like Japan and Australia where it is left to the owner of a property or asset to buy what insurance they can afford or is available.
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