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Disasters wreak $330b havoc on Asia-Pac

Reported by AAP
Thursday, March 22, 2012
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Natural disasters in the Asia Pacific since 2010 have cost the area's economies $A330 billion in damage, insurer Aon says.

Japan's tsunami a year ago, along with Thailand's floods, will rate among the biggest catastrophes in world history. They disrupted global supply chains causing huge economic losses.

The Tohoku earthquake, tsunami and nuclear event racked up $US220 billion ($A211.05 billion) of economic losses, of which just $US30 billion were insured.

Aon chief executive Steve Nevett says the disruption in Japanese and global supply chains shows how risk has become more complex in an interdependent global economy.

"Risk is growing in complexity. It's growing in magnitude and it's growing in frequency," he said on Thursday after unveiling the insurer's 10th annual risk survey.

"Increasingly, the world is realising just how important the supply chain issue is in the interaction with Asia."

Payments from global re-insurers to insurers have topped $A45 billion and caused re-insurers to re-price premiums in the region.

Insured losses from Thailand's floods were running at $US15 billion ($A14.39 billion), with the nation's economy taking a $US50 billion ($A47.97 billion) hit, he said.

He said insured losses for the region had surged to more $A80 billion thanks to the Christchurch earthquakes which caught the global insurance market off guard, he said.

Insurance and re-insurance loss recoveries in Japan were much less relative to those in New Zealand because insurers understood the risks.

"New Zealand wasn't as well understood and the insurance market relied much more heavily on the re-insurance market," Mr Nevett said.

The magnitude 6.3 earthquake that struck Christchurch on February 22, 2011, killing 185 people, resulted in $A14 billion worth of losses.

The series of earthquake that started hitting the South Island city in September 2010 has racked up total losses of $A24 billion, or 18 per cent of New Zealand's gross domestic product GDP - a huge hit to the nation's economy, Mr Nevett said.

Australia's storms and floods left insured losses of almost $A10 billion, and also disrupted supply chains.

Aon wants businesses to understand their own risks, and those faced by customers and suppliers which are frequently located offshore.

"In all of those events, the companies didn't have their locations damaged. It was their customers and suppliers that had their businesses interrupted, or it was infrastructure ... badly affected by those events," Mr Nevett said.

26/10/2014 05:15Sydney, Australia. 26 October,2014
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