MAN­AG­ING THE PRICE OF NAT­U­RAL DIS­AS­TERS

Source: The Straits Times - Sin­ga­pore, 24 De­cem­ber 2012

Insurance - - INDUSTRY UPDATES -

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.

Clarence Ye­ung

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