Guo Shuqing, chairman of the CBIRC, said China’s disaster insurance system sees earthquakes as the main cause of disasters, but it is urgent to include typhoons, floods and droughts in insurance coverage.
Speaking at a financial forum earlier this week, he said there is a need to change the government’s disaster management and rescue model, incorporate insurance into the national disaster relief and emergency management system, and encourage the insurance industry to get involved in disaster risk reduction, Fundraising, Disaster Compensation, and Recovery.
He noted that it had been three months since the heavy rains in Henan on July 20th. In the severe floods caused by the rains, the insurance industry carried 11% of the damage, a significant increase from 7.8% in 2020 when insurers responded to floods in the Yangtze River Basin. Separately, Mr. Ye Yanfei, head of the CBIRC’s Policy Research Bureau, said during a media briefing that it is estimated that insurers would eventually pay CNY 7 billion in compensation for car damage due to the Henan floods.
Mr. Guo nevertheless pointed out that the level of insurance premiums in China is already the second largest in the world, but that insurance density and insurance depth still need to be improved and that there is a lack of diversity in insurance coverage, for example the main risk of Nat CAT in the event of an earthquake disaster insurance is covered.
He said the insurance industry could strengthen links with other sectors such as agriculture, geology, meteorology, water management and emergency rooms, and fund professional institutions to conduct disaster risk reduction research.
He also said several flood incidents had exposed fatal shortcomings in public utilities such as urban flood control and drainage, communications and medical care. “Urban and rural construction is not only the responsibility of the planning and construction department, but also the responsibility of society as a whole, including the financial system,” said Guo.