Taiwan has experienced a series of extreme weather events in recent years, which are expected to continue into the future, says the report 14 Shades of Risk In Asia-Pacific: Evolving Risk Concerns in Asia-Pacific by Marsh & McLennan Companies’ Asia-Pacific Risk Center.
Danny Yeung, Managing Director, Guy Carpenter, says: “Given Taiwan’s position in a major earthquake zone and the concentration of industrial assets, the low catastrophe insurance penetration in Taiwan poses a gap in coverage. For the public sector, the protection gap is a significant factor and the use of public-private risk transfer partnerships can be explored to address the issue.”
The report 14 Shades of Risks, produced by Guy Carpenter’s parent company, states that in August 2018 Taiwan experienced extreme torrential rain and flooding, killing six and requiring the evacuation of more than 6,000 people.(1) Taiwan is also frequently hit by typhoons. In September 2016, Taiwan was hit by Typhoon Meranti, one of the most intense tropical cyclones in recorded history. There is also a high-risk of windstorms and earthquakes, and analysts project that fallouts from these events could reach hundreds of millions in U.S dollars.
According to Guy Carpenter, Typhoon Nari in 2001 caused economic loss of USD 5.7 billion and insured loss of USD 580 million; Typhoon Morakot in 2009 caused over 700 deaths and insured loss of USD 91 million; and insured loss from Typhoon Soudelor in 2015 amounted to USD 68 million. Taiwan experienced two earthquake events that significantly impacted the insurance industry - the Chi-Chi earthquake in 1999, which caused insured loss of USD 800 million; and the Meinong earthquake in 2016 with insured loss of USD 600 million.
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1. Flooded households to receive NT$20,000 payment: premier. Taiwan News (2018)