Weeks of severe monsoonal rains in China triggered flooding and landslides that destroyed homes and infrastructure across 28 Chinese provinces and regions, and led to large loss of life.

Chinese government sources noted the recent flooding is the worst China has seen since 1998.

Although the economic losses from these flood-related disasters are huge, there is not likely to be a large impact on the insurance industry, according to Marsh Risk Consulting.  A recent study by Munich Re showed that, although the 10 largest floods in China since 1980 have caused total economic losses of USD 135 billion, the insured loss has only been 1-2 percent of this amount. 

The report quotes low insurance penetration in rural areas of China and the fact that official efforts are directed at protecting economic assets, rather than people, from flooding, as major drivers of this trend.

Marsh will continue to monitor the situation and update clients of developments.