Economic cost of Nepal earthquake could reach US$5bn – Aon

May 9 2015 by InsuranceAsia News Staff

Nepal’s devastating earthquake is expected to result in economic losses as high as US$5bn, more than double previous estimates and equal to 25% of Nepal’s gross domestic product, according to the Global Catastrophe Recap Report released by Aon Benfield’s catastrophe model development team Impact Forecasting.

Initial government figures from the earthquake region showed that more than 700,000 homes, buildings and historical sites were damaged or destroyed.

Nepal has a very low rate of insurance penetration, which means merely a fraction of the total damages were insured, the report said.

Impact Forecast Asia Pacific Head Adityam Krovvidi said the team had already developed an earthquake scenario model for Nepal, which it released at its Singapore conference this week.

The team also plans to send a group of seismic and vulnerability experts to conduct a reconnaissance study.

Also in April, the Global Catastrophe Recap Report showed that four severe weather episodes resulted in aggregate economic losses of almost USD1bn in China while the Insurance Council of Australia estimated insured losses at nearly US$350m following the severe weather that recently hit New South Wales and Queensland.