In China, the struggle against annual flooding is compounded by a stark lack of insurance coverage, with only 10% of families holding home insurance compared to nearly 90% in the United States. Zheng, a 60-year-old resident of Hemudu, exemplifies the plight of many as he grapples with the financial burden of repeated flood damage without adequate insurance protection. Over the past decade, Swiss Re AG estimates that China has faced approximately $273 billion in uninsured losses due to natural disasters, highlighting a critical gap in disaster preparedness and financial resilience.
The Chinese government has recognized the need for a robust insurance system, particularly following the devastating 2008 Sichuan earthquake, which spurred discussions on improving disaster insurance frameworks. In 2014, Ningbo launched a citywide catastrophe insurance program in response to public protests after typhoons, aiming to provide a safety net for residents. However, this Ningbo Model has faced criticism for its limited payouts and the financial constraints local governments encounter, which hinder the expansion of comprehensive insurance coverage.
As climate change intensifies the frequency and severity of flooding, insurance premiums are rising, further discouraging families from obtaining coverage. The World Bank warns that by 2030, China could see a loss of 2.3% of its GDP due to weather-related damages, underscoring the urgency of developing a national catastrophe insurance system. Yet, discussions on such a system have stalled, primarily due to disagreements over funding responsibilities, leaving local governments, already trillions in debt, struggling to finance disaster relief efforts. Without a cohesive national strategy, the risk of catastrophic financial losses from flooding remains alarmingly high, threatening both individual livelihoods and the broader economy.
[rtvonline.com]