MANAGING THE PRICE OF NATURAL DISASTERS
Source: The Straits Times - Singapore, 24 December 2012
The chief operating officer of Asia Capital Reinsurance (ACR), Clarence Yeung said better risk management in floodprone areas and other vulnerable places will go a long way to keep insurance premiums down. Last year’s earthquake in Japan and floods in Thailand sent reinsurance pricing sky rocketing while terms and conditions have been further restricted. In Thailand’s case, risk management measures could mean better water barriers or building access roads. Natural disasters occur worldwide but no matter how far away, the repercussions can be felt by insurance and reinsurance customers everywhere. Yeung noted that policies set by international reinsurers are dictated by what is happening outside Asia, rather than within. He cited Hurricane Katrina, which devastated parts of the United States in 2005. He warned that if risk management measures are not put in place, insurance premiums will continue to rise with each natural catastrophe and the insured will have to bear the cost.