Australias floods highlight the need for comprehensive flood insurance Since the early 1970s, the provision of personal lines flood insurance has been debated in Australia. For many years, flood damage from overflowing rivers was explicitly ex- cluded from standard Australian insurance policies on the basis that the exposure was difficult to assess. Furthermore, as storm damage is usually covered, the insurance the distinction between wind, rainfall/flash flood damage and ovem ed by storms industry often found itself paying for losses when floods were trigge cult to prove and political pressure can be substantial. For this reason, some insurance companies began to offer comprehensive flood coverage in 2010. Given the pressure on the industry to pay claims, the industry has decided to work with the Insurance Council of Australia to increase flood coverage and to harmonise the terms and condi tions of flood policies Asia(losses in USDm) In terms of total damage to society. Asia was the hardest hit region in 2010. China and Victims 17955 Pakistan experienced extraordinary rainfall during the summer, resulting in unprece- Total economic losses 74840 dented floods affecting the entire length of the country in Pakistan and several larg 2240 regions in China. More than 6000 people died as a result. Moreover, flash floods and massive landslides added to the overall damage to dwellings and infrastructure in the affected areas. Entire towns were washed away. More than 2 million houses were de- stroyed and more than 38 million hectares of farmland were completely flooded, with evere soil erosion occurring in some areas according to the Red Cross. In Pakistan 20% of the country 's agricultural land was affected, severely impairing the livelihood of more than 20 million people. For Pakistan, this was the worst natural disaster in its history In China, an estimated 230 million people were affected. 15 million of whom Insurers absorbed only a fraction of the The overall damage was estimated to be approximately USD 53bn for China and more USD 53bn economic loss caused by the than USD 6bn for Pakistan. With estimated insured losses of usd 761m insurers ab- floods in chin sorbed only a small fraction of the total losses from the floods in China, leaving the rest of the losses to be borne by individuals, government and NGOs clone Phet, which struck Oman and Pakistan, triggered additiona USD 150m and claimed the lives of 39 people. Typhoon Kompasu 32 people and cost insurers USD 143bn. An earthquake in Qinghai, China killed 2 968 people, result- ing in insured claims estimated at less than USD lm e and mining accidents together The region was also affected by a large number of man-made disasters, namely ma d more than 1 oo0 lives in asia time disasters, in which an estimated 665 people lost their lives. Mining accidents many of which occurred in illegal mines - claimed 378 lives Africa Africa(losses in USDm The number of victims in Africa was approximately 2 600. The floods in Uganda and Victims 2640 in Central and Western Africa claimed the most lives Total economic losses 337 124 A lead poisining outbreak from illegal gold mining claimed 400 victims, mostly children Mining accidents caused 320 deaths. Maritime accidents claimed the lives of 410 peo- le. many of whom were illegal immigrants. Swiss Re, sigma No 1/20118 Swiss Re, sigma No 1/2011 Australia’s floods highlight the need for comprehensive flood insurance Since the early 1970s, the provision of personal lines flood insurance has been debated in Australia. For many years, flood damage from overflowing rivers was explicitly ex￾cluded from standard Australian insurance policies on the basis that the exposure was difficult to assess. Furthermore, as “storm” damage is usually covered, the insurance industry often found itself paying for losses when floods were triggered by storms, as the distinction between wind, rainfall/flash flood damage and overflow damage is diffi￾cult to prove and political pressure can be substantial. For this reason, some insurance companies began to offer comprehensive flood coverage in 2010. Given the pressure on the industry to pay claims, the industry has decided to work with the Insurance Council of Australia to increase flood coverage and to harmonise the terms and condi￾tions of flood policies. Asia In terms of total damage to society, Asia was the hardest hit region in 2010. China and Pakistan experienced extraordinary rainfall during the summer, resulting in unprece￾dented floods affecting the entire length of the country in Pakistan and several large regions in China. More than 6 000 people died as a result. Moreover, flash floods and massive landslides added to the overall damage to dwellings and infrastructure in the affected areas. Entire towns were washed away. More than 2 million houses were de￾stroyed and more than 38 million hectares of farmland were completely flooded, with severe soil erosion occurring in some areas according to the Red Cross. In Pakistan, 20% of the country’s agricultural land was affected, severely impairing the livelihood of more than 20 million people. For Pakistan, this was the worst natural disaster in its history. In China, an estimated 230 million people were affected, 15 million of whom became homeless. The overall damage was estimated to be approximately USD 53bn for China and more than USD 6bn for Pakistan. With estimated insured losses of USD 761m, insurers ab￾sorbed only a small fraction of the total losses from the floods in China, leaving the rest of the losses to be borne by individuals, government and NGOs. Cyclone Phet, which struck Oman and Pakistan, triggered additional insured claims of USD 150m and claimed the lives of 39 people. Typhoon Kompasu killed 32 people and cost insurers USD 143bn. An earthquake in Qinghai, China killed 2 968 people, result￾ing in insured claims estimated at less than USD 1m. The region was also affected by a large number of man-made disasters, namely mari￾time disasters, in which an estimated 665 people lost their lives. Mining accidents – many of which occurred in illegal mines – claimed 378 lives. Africa The number of victims in Africa was approximately 2 600. The floods in Uganda and in Central and Western Africa claimed the most lives. A lead poisining outbreak from illegal gold mining claimed 400 victims, mostly children. Mining accidents caused 320 deaths. Maritime accidents claimed the lives of 410 peo￾ple, many of whom were illegal immigrants. Asia (losses in USDm) Victims 17 955 Total economic losses 74 840 Insured losses 2 240 Insurers absorbed only a fraction of the USD 53bn economic loss caused by the floods in China. Maritime and mining accidents together claimed more than 1 000 lives in Asia. Africa (losses in USDm) Victims 2 640 Total economic losses 337 Insured losses 124