Natural catastrophe resilience is on the rise across China’s provinces, according to a new report by Swiss Re Institute.
The country’s national natural catastrophe resilience index rose to 9.0% in 2021 from 8.1% in 2020 and 7.6% in 2019, despite a major flooding event in Henan province in July 2021.
The rise in China’s natural catastrophe resilience also contributed to Asia’s natural catastrophe resilience increasing to 6.2% in 2021 from 5.8% in 2020.
The improvement in resilience in China reflects an expanding non-life insurance market with steady growth in the commercial property line of business, boosted by both regulatory efforts and higher awareness of natural catastrophe protection.
Swiss Re Institute says the joint effort of governments and insurers to improve prevention services such as early warning systems is also an important contributor. For example, in the 2021 flood in Henan, online damage recognition systems helped the claims process, and insurers initially took responsibility for early warning and flood rescue in this event.
The median provincial natural catastrophe resilience index is lower than the national level. implying that many provinces still have lower resilience to this risk than China as a whole. However, that difference is shrinking, to 0.95ppts in 2021 from 1.63ppts in 2019, a sign that protection is becoming more consistent across the provinces.
Beijing and Shanghai are the most resilient administered municipalities for natural catastrophe risks, with both indices at almost 10%, though these levels are still far lower than the world average of 24.6%.