Asian Insurers Little Affected by Tsunamis, S&P Says
Asian Insurers Little Affected by Tsunamis, S&P Says
Netty Ismail Associated Press/Singapore
HSBC Insurance (Asia) Ltd., United Insurance India Co. Ltd. and other Asian insurance companies will probably incur smaller losses from the region's devastating tsunamis than from other natural disasters in 2004, because the affected areas had limited coverage, Standard & Poor's said.
An estimated 150,000 people in 12 countries in Asia and Africa died after a Dec. 26 earthquake triggered giant waves across the Indian Ocean.
"There is no immediate impact on the insurance companies" that S&P rates in Thailand, Malaysia, Singapore, India, Hong Kong and Taiwan, the credit assessor said in a statement today. S&P rates 87 insurance companies in the region, including Malaysia's Hong Leong Assurance Bhd., Thai Commercial Insurance Pcl and AXA Insurance Singapore Pte.
Insurance losses are as yet unclear given the widespread damage, the statement said. The current market estimate of total claims of less than US$10 billion is "significantly lower" than expected economic losses, it said. This would be lower than the estimated $27 billion of insured damages tied to U.S. hurricanes last year.
The affected areas, which include coastal regions of India, Indonesia, Sri Lanka and Thailand, are "characterized by low insurance penetration and relatively undeveloped insurance markets in which the populace and property are generally underinsured or uninsured," S&P said.
Most insurance claims will be related to property damage, business interruption and travel or life insurance, S&P said. The disaster is also unlikely to have a significant impact on the global reinsurance industry, it said.
Zurich-based Swiss Reinsurance Co., the world's second- largest reinsurer, said on Dec. 30 it expects its claims from the Asian disaster to total less than 100 million francs ($88 million). Munich Re, the world's largest reinsurer, said on Dec. 28 it will face less than 100 million euros ($136 million) in claims from the disaster.
Before the tsunamis, natural disasters including hurricanes in the U.S. and typhoons in Japan cost insurers more than $40 billion this year, making it the most expensive year in history, Munich Re said. Disasters cost $15 billion in 2003.