Natural hazards in China

China’s complex climatic and varied geological conditions expose the country to virtually every type of known natural disaster. These events are estimated to affect an average of one out of six people and lead to several thousand fatalities in China each year.

Severe natural hazards also have far-reaching economic ramifications. Among these, earthquakes, typhoons and floods have the most devastating potential. In terms of total economic losses, a major disaster could exceed RMB 1 trillion, equivalent to approximately 6% of China’s GDP (2005). However, only a tiny fraction of these potential losses is currently insured. Without increased insurance penetration, the financial loss burden of such perils could threaten China’s sustained economic development.

Providing an overview of natural hazards in China and highlighting aspects of insuring these risks, this focus report aims to share Swiss Re’s experience in dealing with natural hazards.