Swiss Re signs MoU with City of Dalian during WEF China to strengthen disaster resilience
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China's cities are growing at rapid speed. Dalian, a major city and seaport in the south of Liaoning Province, is one of them. It has achieved significant progress in building itself into a regional financial center in recent years, and exerts increasing influence in Northeast Asia and globally.
While China has a strategic plan to develop urbanisation, many of these zones are situated in high risk areas when it comes to natural disasters. This increasingly means weather-related events can happen as a result of the changing climate. Extreme weather events can therefore hurt China’s booming economic hubs that see a greater concentration of assets, people and technology. Furthermore, global supply chains and economic development could suffer over the longer term.
New pioneering insurance models coming out of a close and fruitful collaboration with Chinese authorities and regulators, aim to increase both urban and rural resilience, and bear testimony to the flexibility of this kind of insurance tool. In these solutions, an index such as cyclone wind speed or rainfall amounts can trigger policy claims. This makes the payout process faster as it no longer relies on surveys and lengthy damage assessments, as in more traditional insurance schemes.
Local governments can also count on readily available funds to help their people in the immediate aftermath of a natural catastrophe and start reconstruction soon after the event.
Two such schemes have been piloted in the provinces of rural Heilongjiang and urban Guangdong – where in both cases the governments are insured, rather than as in traditional insurance which covers individuals and enterprises. In the case of Heilongjiang, the solution is also specifically focused on assisting poverty alleviation.
In signing a Memorandum of Understanding with Swiss Re during the World Economic Forum Summit in Dalian on 28 June 2017, the Dalian city administration will be partnering with Swiss Re under the scope of the city comprehensive insurance programme to make the city more resilient to disasters. These include catastrophic insurance solutions to protect against natural disasters such as drought and cyclone and man-made disasters such as fire and explosion.
Vice Mayor of Dalian Hong Dengjin said: "Innovative risk management solutions developed in partnership like this one, between the city of Dalian and Swiss Re, will allow us to put effective risk financing instruments in place in order to speed up recovery. This will benefit individuals, enterprise and the broader economy in our region. Overall it will strengthen our city's fiscal and physical resilience.
"We're delighted at this important partnership with the City of Dalian, offering our deep risk management expertise and innovative insurance solutions as an effective tool to build concrete disaster resilience plans. More and more cities around the world recognise the win-win of understanding their risks and preparing for disaster in advance, rather than responding after the fact. It helps people, business and the economy. We hope more provinces in China and around the world will consider the advantages and follow suit," added Jayne Plunkett, Regional President of Asia, Swiss Re.