CHINA WEATHER CLAIMS REACH 100M YUAN, BUT TOTAL INSURED LOSSES UNCERTAIN

The first inklings of the level of insurance penetration in China when bad weather hits are beginning to emerge. Chinese insurers said that they had already received claims for about 100m yuan ($13.9m) as a result of the worst snowstorms to hit China for 50 years. Economic losses have been put at 25bn yuan. Nomura Securities Analyst Ben Lin told Bloomberg that “the total impact is anybody’s guess. It’s very hard to get such estimates for China. There’s so much regional variation in risk profile and exposure”. Listed insurers in China saw their stock prices suffer yesterday, although how much was caused by the catastrophe and how much by a general sell-off in the wake of subprime jitters is unclear. Ping An continued a week of decline with a fall of 6.51%, while China Life was off 7.35%. Ping An said that it had received more than 18,000 storm-related claims, of which it had settled more than 14,000. The claims were described as “relatively small”. The total losses as a result of the storms are likely to take several months to work through the system, meaning that the major impact on insurers’ earnings could be felt in the second half of the year.