Emerging economies face catastrophe threat

COUNTRIES with high-growth economies could see their progress derailed by natural disasters, according to research released today.

It finds that emerging nations such as Vietnam, China and India do not have enough insurance to cover the effect a major natural catastrophe, leaving the countries at risk of long-term economic damage if they are severely affected by an earthquake or hurricane.

The research, commissioned by Lloyd’s of London from the Centre for Economics & Business Research (CEBR), says China insured just 1.4 per cent of losses arising from natural catastrophes between 2004 and 2011, with $208bn (£130bn) of uninsured losses having a negative affect on economic performance.

“This ‘insurance gap’ has a huge and lasting impact on the ability of businesses, governments and people to recover from the earthquakes, hurricanes, flooding and forest fires that affect us all every year,” said CEBR chief executive Douglas McWilliams.