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Insurance in Asia: Narrow-minded

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Insurance in Asia


Asia can do more to protect itself from the risk of natural catastrophes

IT IS known as the insurance-protection gap. It can set vulnerable economies back years. It is growing inexorably, and nowhere does it yawn more widely than in Asia.
The gap in question is the difference between insured and uninsured losses when natural catastrophes strike. Of the $101 billion in global economic losses in 2014, nearly half stemmed from floods, cyclones and other disasters in Asia. Of these, only 8% were covered by insurance, according to Swiss Re, a big reinsurer, compared with 60% in America. In some countries the gulf is wider still. The earthquake that struck Nepal in April is now thought to have caused around $5 billion in damage, some 25% of GDP. Yet the bill for insurers will reach only around $160m.

Underinsurance is a problem for all risks in Asia (see article). But a cyclone or a tsunami seems far more remote than an everyday threat, so Asian consumers make insuring lives and …