Smaller but More Frequent Catastrophes Loom Over Insurance Sector | Sidnaz Blog

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Less devastating than mega events such as earthquakes and hurricanes, these secondary perils, as they are known in the industry, happen relatively frequently and include hail, drought, wildfire, snow, flash floods and landslides.

Climate change and urban sprawl are driving a jump in secondary perils losses, said Tamara Soyka, Head Cat Perils EMEA at

Swiss Re.

Insurers and reinsurers, who traditionally focused on predicting big weather events that can cause widespread damage, are increasingly incorporating secondary-peril models.

Swiss Re, for instance, last year started considering pluvial—that is, heavy rainfall, similar to the recent European floods—flood zones when assessing risks.

A storm system over Europe dumped heavy rains in recent weeks, causing heavy floods in Germany, Belgium and parts of the Netherlands and Switzerland. The German Insurance Association on Wednesday said it expects insured losses could hit nearly $6 billion as a result of the flooding in North Rhine-Westphalia and Rhineland-Palatinate. It doesn’t yet have estimates for the damage in Saxony and Bavaria.

Before-and-after images show the extent of damage in German towns hit by the region’s worst flooding in decades. Visiting one inundated village, German Chancellor Angela Merkel called for more effort to combat future climate-related disasters. Photo: Satellite Image ©2021 Maxar Technologies

This year is expected to be the most damaging for the country since 2002, when insured storm damage totaled about €11 billion, equivalent to $12.98 billion, the association said. While mostly all residential buildings have windstorm and hail coverage, only 46% of homeowners have cover for heavy rain and floods.

Heavy rain, hailstorms and wind in Germany and Switzerland in June have already cost the industry an estimated $4.5 billion, according to analysts at Berenberg.

Analysts at

Moody’s Investors Service

in a note this week said German insurers “may find it challenging to protect homeowners against climate risk without significant price increases.”

Insurers paid out $81 billion for damages related to natural catastrophes in 2020, according to reinsurance giant Swiss Re, up 50% from 2019 and comfortably topping the $74 billion 10-year average for such losses.

Secondary peril events accounted for more than 70% of the $81 billion in natural catastrophe losses last year, according to the data.

Firms expected to take hits to their earnings from the European floods include Swiss Re,

Munich Re AG

and

Zurich Insurance Group,

according to analysts. Spokespeople for Swiss Re, Zurich and Munich Re declined to give estimates of the potential impact.

UBS Group AG analysts project $6 billion worth of losses for the industry, split into $2 billion for primary insurers and $4 billion for reinsurers.

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The prospect of more intense weather has insurers rapidly updating their risk-assessment models and recalculating the price of insurance. Property insurers faced an estimated $18 billion bill for damage to homes and businesses from the long stretch of frigid weather in Texas and numerous other states, the equivalent of a major hurricane, The Wall Street Journal reported earlier this year.

In some cases, the increased frequency of extreme weather events can lead insurers to drop coverage altogether. Some insurers in California chose to not renew insurance policies for homeowners in high-risk areas for wildfires, the Journal reported in 2019. California wildfires the prior two years had killed dozens of people and racked up more than $24 billion in insured losses.

Analysts say the losses from the European flooding will be manageable for the industry. While they may dent quarterly or yearly earnings, they won’t have a seismic effect on their capital. If the coming U.S. hurricane season is a normal one, that will likely crimp earnings further for some.

Flooding in Altenahr, Germany. In some cases, the increased frequency of extreme weather events can lead insurers to drop coverage altogether.



Photo:

friedemann vogel/Shutterstock

The Euro Stoxx Insurance index is up 7.6% this year, trailing the broad Euro Stoxx 600 stock-market index, which is up nearly 15%. The insurance index has fallen 6.4% since March 30, which Berenberg analysts attribute to fears of potential dividend cuts due to recent natural catastrophes.

The costs of reinsurance in Asia and the U.S. went up over the past couple of years owing to hurricanes and wildfires, said Berenberg analyst Michael Huttner. But prices in Europe didn’t increase significantly over that period. The floods will likely help catastrophe pricing increase, said Mr. Huttner.

Will Hardcastle, an analyst at UBS, says this year is shaping up to be the fifth consecutive year that natural catastrophe losses will be above reinsurers’ budgeted level.

“The last five years would suggest you’re not getting appropriate pricing for it,” he said. “It’s always difficult to determine whether the trend is short term. Now at this point you have to be thinking it’s more structural” because of climate change, he said.

Write to Julie Steinberg at [email protected]

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Latest News Today – Floods Rage Through World’s Biggest iPhone Production

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Floods Rage Through World's Biggest iPhone Production Centre

The deluge on Tuesday was equivalent to more than 8 months’ worth of city’s average rainfall

Around 100,000 people have been relocated from a central Chinese city known as the world’s biggest production base for iPhones, after record rainfall led to widespread floods and the death of at least 12 people.

The city of Zhengzhou in the central province of Henan suspended inbound flights, while rescue workers and authorities worked Wednesday to prevent dam breaches, restore lost power, assess collapsed roads and pump out submerged gas stations. President Xi Jinping urged officials to step up disaster relief measures, saying the city was experiencing a severe impact, CCTV reported.

The deluge on Tuesday was equivalent to more than 8 months’ worth of the city’s average rainfall, making the event another example of extreme weather that many scientists contend is being exacerbated by the impacts of climate change. Heatwaves have struck the U.S. and Canada in recent months, while Europe and India have suffered major floods, Siberia has experienced wildfires and drought has gripped parts of Africa and Brazil.

“Climate change has made extreme weather like heat waves and floods more frequent and more deadly in the past 20 years,” said Greenpeace East Asia climate and energy campaigner Liu Junyan. Recent events in Henan, along with North America and Europe “are all wake-up calls reminding people of the climate change crisis,” she said.

Zhengzhou saw 457.5 millimeters (18 inches) of rain fall in the 24 hours through 5 p.m. on Tuesday, the highest since records began for the city of more than 10 million people, the official Xinhua news agency reported. That included a record 201.9 millimeters in a single hour, from 4 p.m. to 5 p.m, a record for mainland China. Zhengzhou typically receives average annual precipitation of about 640.8 millimeters.

Henan is one of China’s biggest wheat-producing areas and a major manufacturer of machinery, while Zhengzhou is home to the largest iPhone-making plant, owned by Taiwan’s Hon Hai Precision Industry Co. The flooding struck just as the company, known also as Foxconn, prepares to ramp up output ahead of the launch of Apple Inc.’s latest devices toward the end of the year.

Hon Hai’s plant in Zhengzhou receives components needed to assemble iPhones from global and domestic Chinese suppliers before shipping out the finished producers. A representative for Hon Hai said it was looking into the situation.

Henan is also China’s second-largest food supplier, accounts for about a quarter of the country’s wheat harvest and is a major center for frozen food production. It is also a key hub for coal and metals.

While China has already harvested its main wheat crop, earlier widespread rains impacted quality from areas including Henan. That is expected to drive up wheat imports by as much as 40% this year to the highest level since the mid-1990s, according to Bric Agriculture Group, a Beijing-based consulting firm. China has increased purchases from the U.S., Canada and Australia this year.

Submerged Subway

Pictures published by state media showed large sections of Zhengzhou roads submerged, while videos posted on social media depicted passengers having been in flooded-out subway cars with water levels up to their shoulders, residents pulled to safety with ropes from fast moving floodwaters, and cars washed along inundated highways.

Xinhua cited authorities in Henan as saying 12 deaths had been confirmed as of Wednesday morning local time. Thousands of rescue workers including soldiers and firefighters have been dispatched to the city, it added.

In Henan province’s Luoyang city, a dam is at risk of collapsing, the People’s Liberation Army said Wednesday in a post on Weibo. At Zhengzhou, the Guojiazui water reservoir is also posing a major safety risk and nearby residents have been evacuated, according to a statement on the Henan government’s website.

The flooding came shortly after key Chinese cities warned that homes and factories face new power outages as historic demand and supply shortages strain energy grids. Eleven provinces including eastern manufacturing hubs and landlocked central China reported record demand and peak-load surges last week, amid hot weather.

Heavy rain had already forced Henan last week to start banning exports of its coal supply to other areas, amid concern over energy supplies.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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Hyderabad: Uncontrolled urbanisation triggering more | Sidnaz Blog

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HYDERABAD: The city has grown 16.5% in the last 20 years, but this rapid urbanisation has resulted in a changed topography that fails to bear the onslaught of even small monsoon rains, causing flooding and misery. A research study, based on satellite data from 2000 to 2020, reveals there was uncontrolled urbanisation, leading to higher flood volumes and more flooding episodes.
The study was conducted by researchers from National Institute of Technology (NIT), Warangal, comparing two major episodes of urban flooding — August 2000 and October 2020 — in Hyderabad . The risk between 2000 and 2020 flood events went up by 50%.
According to the study, rapid unplanned urbanization, ignoring the regional and local hydrological landscape has aggravated the flooding severity. “Uncontrolled urbanization (16.5% increase) over the last two decades have substantially influenced the urban hydrology, producing higher flood volumes for comparatively small rainfall event,” the study said, emphasising the need for “regulating urbanization, providing enhanced drain capacity, rejuvenating the water bodies and streams” to check and reduce the spatial flooding extent.
Apart from researchers of NIT, Warangal, those from Sree Vidyanikethan Engineering College, Tirupati, and Indian Institute of Remote Sensing, Dehradun, were also part of the study published in the recent issue of ‘Current Science’. The team comprised Vinay Ashok Rangari, CM Bhatt and NV Umamahesh.
Though Hyderabad had not recorded the quantum of rainfall it got in September 1908 resulting in the Musi deluge in the last 113 years, the severity of the flooding has been on the rise. This the researchers attributed to unplanned growth of the city and encroachment of water bodies. “The August floods of 2000 (241.5 mm rainfall in 24 hours) caused huge property loss and more than 90 residential colonies were submerged (2 to 4 metres of water level). Hyderabad witnessed another intense downpour on October 13, 2020, and the event points to the persistent warnings that people chose to overlook over these years… the massive flooding… impacted more than 120 colonies, 20,500 homes and causing as many as 80 deaths,” the researchers said.

Satellite data showed a significant reduction in open land and an overall decline in the number of water bodies and their spread. The researchers focussed on Zone-12 that comprises Begumpet, Ameerpet, Madhapur, Kukatpally, Rajiv Gandhi Nagar, Chandra Nagar, Tulasi Nagar and Laxmi Nagar. The Zone-12 had 65% impervious area in 2000. It has now increased to 89%. This, in other words, means it witnessed 23.75% concretisation in the last 20 years.
“The increase in imperviousness occurred at the cost of encroachment of vegetative areas, open land parcels and water bodies at 0.95%, 15% and 0.65% respectively. The increased imperviousness limits the infiltration process, thereby increasing the total runoff from the urbanized catchments up to six times and peak flows up to 1.8 to 8 times, thus leading to flooding,” the study said.
The study revealed that in October 2020 rainfall event, water started accumulating at about seven hours of rainfall in the areas along the streamline. The water level started building up with the passing time that caused the spreading of floodwater in adjoining low-lying areas at around 14 hours.
“We can observe a more than 50% rise in high risk for the October 2020 event. Similarly, there is significant rise in low and medium risks compared to the August 2000 event,” the researchers added.

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Latest News Today – Cloudburst Triggers Flash Floods In Dharamshala’s Bhagsu

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Heavy rain has lashed Mcleodganj and nearby areas

A cloudburst in Dharamshala has triggered a flash flood, washing away vehicles and causing damage to properties in the Bhagsu Nag area. Several videos have been shared by locals as well as the authorities, including SHO Mcleodganj Vipin Chaudhary, on Twitter. A 37-second clip, shared by news agency ANI, shot from the balcony of a building, shows dreadful visuals of a huge amount of water gushing rapidly through the parked vehicles. A few seconds into the clip, an SUV is seen being uprooted by the water but blocked by other vehicles, bundled together by flash floods.

People capturing these visuals could be heard screaming at the sight of a huge SUV being washed away. Once the car was blocked by other vehicles, one of them said: “Now, no car will go beyond this.” Others expressed shock at the sheer amount of water coming from the other side.

Heavy rain has lashed the Kangra district, 58 km from Dharamshala, throwing life into disarray. The rapid pace at which the water was flowing transformed — in no time — a brook in Bhagsu Nag, which is a tourist attraction, into nothing short of a river. Some of the hotels in the area have reported heavy damage. The cloudburst and flash floods have instilled fear in people and also caused commotion and confusion.

Chief Minister Jairam Thakur has sought a report on the losses suffered and has directed officials to extend all help to the affected areas.

Besides Kangra, several other districts in Himachal Pradesh have also witnessed heavy rain after days of hot weather. The Monday downpour brought respite but caused a lot of damage too.

Another video shared by a Twitter user showed the magnitude of flash floods. The person recording the video is heard saying, “This is live from Dharamshala. A cloudburst has taken place. The visuals look scary as tiny houses in the background appear to be at the risk of being washed away in a while if not immediately.

Heavy rain has lashed Mcleodganj and nearby areas at a time when tourists from different parts of the country have thronged the hill station.

Union Home Minister Amit Shah has spoken to Mr Thakur and taken stock of the situation arising due to the floods in several districts of the state and assured him all possible help from the Centre. He also conveyed to him that National Disaster Response Force (NDRF) teams are reaching the affected areas for rescue and relief work.



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