As Typhoon Nesat Hits China, Philippines Insured Losses Stay Below US$100 Million
<table cellspacing=0 cellpadding=0 border=0><tr><td align=right>Copyright: </td><td>(c) 2011 A.M. Best Company, Inc.</td></tr><tr><td align=right>Source: </td><td>A.M. Best Company, Inc.</td></tr><tr><td align=right>Wordcount: </td><td>386</td></tr></table><!-- start_body --><br><p>Typhoon Nesat is expected to bring less than <money>US$100 million</money> in insured losses to <location value="LC/ph" idsrc="xmltag.org">the Philippines</location> after it made landfall on the province of Aurora, bringing landslides and agricultural damage, according to risk modeler Eqecat.</p><p>There is significant damage to agriculture and structures, but most are uninsured, said Eqecat. Power outages and blocked roads limited access to many damaged areas. Nesat’s impact in <location value="LC/ph" idsrc="xmltag.org">the Philippines</location> was through widespread flooding and limited wind damage. Insured losses to the rural region are expected to remain under <money>US$100 million</money>.</p><p>Nesat led to significant damage to the rice and corn-growing agricultural provinces of Aurora and Isabela. The winds from Nesat were much higher than those observed from Typhoon Nock-Ten in July. Nock-Ten was estimated to bring economic losses of below <money>US$100 million</money> in <location value="LC/ph" idsrc="xmltag.org">the Philippines</location> and <location value="LC/cn" idsrc="xmltag.org">China</location>, according to Eqecat.</p><p>Nesat is one of the strongest typhoons to hit <location value="LC/ph" idsrc="xmltag.org">the Philippines</location> this year. However, "the storm steered clear of metro <location value="LU/ph..manila" idsrc="xmltag.org">Manila</location>, where the highest concentration of insured property is located," said <person>Peter Sousounis</person>, principal scientist at risk modeler AIR Worldwide.</p><p>"While damage is anticipated to some residential properties, a high proportion of residential losses are not expected to be insured. Overall the penetration of insurance in <location value="LC/ph" idsrc="xmltag.org">the Philippines</location> is estimated at 15% across all lines of business," said Sousounis in a statement.</p><p>Nesat pounded <location value="LC/ph" idsrc="xmltag.org">the Philippines</location> main island of Luzon with powerful winds and heavy rains as it came ashore. Reinsurance intermediary <org>Guy Carpenter & Co.</org> said several roads and bridges were damaged.</p><p>In <location value="LU/ph..manila" idsrc="xmltag.org">Manila</location>, financial markets, government offices, transport services and schools were closed due to the typhoon. Large parts of the city experienced power outages and flooding also occurred. However, Nesat is not expected to bring significant insured losses given its wind speeds in the metro <location value="LU/ph..manila" idsrc="xmltag.org">Manila</location> area and generally low take-up rates in the areas most heavily affected by the storm, according to AIR.</p><p>After passing <location value="LC/ph" idsrc="xmltag.org">the Philippines</location>, Nesat made landfall in <location value="LU/cn..hainan" idsrc="xmltag.org">Hainan</location> province in southern <location value="LC/cn" idsrc="xmltag.org">China</location>. A heavy-rain warning related to the typhoon was issued to the region. Nesat is not expected to bring "significant insured losses" in <location value="LC/cn" idsrc="xmltag.org">China</location>. Insurance penetration for typhoon coverage is low in <location value="LC/cn" idsrc="xmltag.org">China</location>, particularly for residential risks, with variations among provinces. <location value="LU/cn..hainan" idsrc="xmltag.org">Hainan</location> has one of the lowest penetration rates for insurance, said AIR.</p><p>(By <person>Iris Lai</person>, <location value="LC/hk" idsrc="xmltag.org">Hong Kong</location> bureau manager: <a href="mailto:[email protected]">[email protected]</a>)</p>
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