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Henan floods to trigger record insurance claims of US$1.7 billion as thousands of cars, property damaged

  • PICC and Ping An have together received almost 250,000 claims from clients
  • A large portion of the claims could come from Zhengzhou, where a lot of property and cars have been damaged

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Thousands of cars and houses were damaged following heavy rainfall in Henan province last week. Photo: Reuters
Enoch Yiu

The Henan floods are likely to see total insurance claims of as much as 11 billion yuan (US$1.7 billion), Goldman Sachs said, with one expert saying this could possibly be the largest natural catastrophe for insurers in China’s history.

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The floods in the central Chinese province of Henan, caused by unprecedented rainfall last week, have killed 58 people with five still missing, while thousands of cars and homes have been damaged and farmland inundated. In the provincial capital Zhengzhou, almost 400,000 people were displaced and the direct economic losses for the city stood at 65.5 billion yuan, authorities said.

A large portion of the claims could come from Zhengzhou, where a lot of property and cars have been damaged, Goldman Sachs said in a report.

“The Henan flooding may well trigger the largest insurance payment in a single natural catastrophe in China as Zhengzhou is a major city,” said Louis Tse Ming-kwong, managing director of Wealthy Securities.

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Residents of Xinxiang in China's Henan province cope with continued threat of floodwaters

Residents of Xinxiang in China's Henan province cope with continued threat of floodwaters

The prevalence of insurance cover, which is much higher now than in the past, will be a major factor in deciding the payout, he added.

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Two major insurers saw their share prices plunge after they disclosed their exposure on Monday.

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