Shanghai, China’s financial hub, has been spared the full impact of Typhoon Wipha, as the storm’s center passed around 60 miles (100 kms) to the west of the densely populated area. Wipha weakened substantially once it hit the Chinese mainland, and has now been downgraded to a tropical storm.
Nonetheless a bulletin from Risk Management Solutions warned that even if Wipha passes further inland substantial damage from floods caused by heavy rains would likely occur, as the “east coast of China is particularly vulnerable to typhoons.”
RMS noted that Typhoon Matsa, which hit the same area in 2005 as a category 1 storm, “caused severe flooding, especially in Shanghai, damaging 59,000 houses. The total economic damage was estimated at $2.19 billion, of which only $85 million was insured.”
Domenico del Re, Asia Pacific model manager at Risk Management Solutions, commented: “Despite its vulnerability to natural catastrophes like typhoons, China’s insurance market is still in its infancy and property insurance penetration is generally low. However, large cities are the exception and coverage is becoming more widespread, with over 25 percent of property insurance in Shanghai now written by foreign companies.
“Shanghai has undergone rapid development in recent years, with hundreds of high-rise apartment blocks built across the city. Most of these are designed to withstand strong winds, and should only suffer minor damage. The city will be particularly exposed to flooding, as the newly urbanized areas won’t have been tested for the excessive rainfall caused by typhoons.”
Source: news reports, RMS – www.rms.com
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