BEST'S COMMENTARY: HENAN FLOOD LOSSES EXPECTED TO BE MANAGEABLE FOR CHINA INSURERS
HONG KONG, July 30 (Bernama-BUSINESS WIRE) -- Although the recent severe rainfall that hit the province of Henan, China, could become the country’s largest insured loss event ever, AM Best is of the view that China’s non-life insurers will be able to manage and absorb the losses, according to a new AM Best commentary.
In its Best’s Commentary, “Henan Flood Losses Expected to Be Manageable for China Insurers,” AM Best notes that the heavy insured toll can be attributed to China’s urbanization, as well as the fact that the extreme weather event hit a major city. AM Best expects motor insurance to account for the vast majority of incurred claims, given the heavy flooding in Zhengzhou city. The losses are compounded by coverage expansion from the country’s comprehensive motor reform in September 2020, which extended flood damage coverage to include water damage to motor vehicle engines under new voluntary motor policies.
The agriculture insurance segment also is expected to bear a significant portion of claims. China’s agricultural insurance segment has become the world’s largest agricultural insurance market, and has been growing at an annual rate of 20% over the past decade with a premium volume today that has surpassed that of the United States.
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