A new global survey has revealed the impact that under-insurance has had worldwide. According to Swiss Re’s latest report, Underinsurance of Property Risks: Closing the Gap, the lack of property insurance is costing businesses and homeowners.
Natural catastrophes cost US$1.3 trillion over last decade
Despite the damage natural disasters can cause, 45 per cent of those surveyed were unaware if their policy covered earthquakes and a further 37 per cent were unsure if it covered flooding.
On an international scale, the gap between insured and total losses has increased at a steady rate over the last 10 years, with 70 per cent of economic losses remaining uninsured. This amounts to US$1.3 trillion in capital lost.
With natural catastrophes driving high insurance premiums in North Queensland, this report warns that failing to insure your property could prove to be even more expensive.
The report highlights disconcerting data regarding how Australians view insurance. It states that in 2013, more than 80 per cent of homeowners reported they were under-insured for their home and contents. A further one-third of respondents had not updated their details to include new possessions.
Despite the damage natural disasters can cause, 45 per cent of those surveyed were unaware if their policy covered earthquakes and a further 37 per cent were unsure if it covered flooding. Even in areas that had high risk for floods, 23 per cent remained unsure whether their coverage would protect their assets.
Australians should take heed of the expense that Hurricane Katrina continues to cost Americans 10 years on. Allianz Global Corporate and Specialty has released a report, detailing what lessons the natural disaster can teach us.
Allianz report that Hurricane Katrina caused US$125 billion in overall damages as well as more than US $60 billion in insured losses. This makes it the most expensive disaster in the history of the global insurance industry.
What have companies learnt in the last 10 years since the hurricane?
As the scientific community recognises that natural disasters are getting more severe, ensuring business continuity is paramount to your company surviving after a natural disaster, states Risk Consulting Pacific Regional Manager Iain Ritchie.
“Not only is pre and post-loss risk management crucial in mitigating the impact of increasing windstorm losses, risk management should also focus on loss minimisation during windstorm events,” says Mr Ritchie.
The report emphasises the importance of business insurance coverage and ensuring your company can stay running.
After a natural disaster, many businesses are forced to relocate, which can adversely affect their client base. Allianz’s study recommends establishing a plan, such as business interruption cover, that can help your company get back on its feet as soon as possible. This plan should also include clear priorities that identify what is most important to getting your business back on its feet.
Concerned about your firm? Contact the team at MGA with any queries regarding coverage for your property.