CHINA: The most powerful earthquake in China since 1950 shows the nation's insurance industry is decades behind those of the world's biggest economies.
Just 5 per cent of the more than $20 billion (€13 billion) of damage from the quake in Sichuan province is covered by insurance, according to estimates from an official at the China Insurance Regulatory Commission.
By contrast, about half of the $120 billion of estimated costs from Hurricane Katrina, the most expensive storm in US history, was insured by companies or the federal government, data compiled by analysts at New Jersey-based Property Claim Services show.
"The earthquake underscores how much room insurers have to penetrate into rural China," said Zhang Ling, who oversees $1.1 billion for ICBC Credit Suisse Asset Management.
"There'll be much more momentum and government support to do that after this year's natural disasters." China Life Insurance and Ping An, the nation's biggest insurers, have yet to extend their reach across China, where only 4 per cent of the nation's 1.3 billion people have insurance, according to data compiled by KPMG International.
By contrast, 77 per cent of Americans own some type of insurance policy.
"If a disaster like this happened in Europe or the US, the claims situation would be very different," said Michael Spranger, a Hong Kong-based earthquake analyst at Munich Re, the world's number two reinsurer, after Swiss Re. - (Bloomberg)