International Law

Econ Impact of Quake

By Stan

I don’t know about you, but this news from the FT hit me even harder for some reason than more traditional quake coverage (I guess you get numb to that after a while). Anyway, the situation that these figures represent are quite disheartening.

As the official death toll from the Sichuan earthquake hit 40,075 on Tuesday night night, and hopes of finding more survivors faded, Chinese companies began counting the economic costs.

Despite the huge loss of life, economists expect the overall impact on the economy to be relatively small, in large part because the stricken area is one of the nation’s poorest.

And there’s more:

“Early estimates of total property losses from the quake range from $10bn to $20bn,” said Sally Yim, a Moody’s analyst, in a report. “However, insured losses are estimated to amount to only a fraction of this cost as insurance penetration in China remains low, and most Chinese P & C [property and casualty] policies do not cover earthquakes.”

China’s 10 leading insurers derive less than 5 per cent of their premiums from Sichuan province, says Moody’s.

Full post as published by China Hearsay on May 22, 2008 (boomark / email).