Risk Management in the Aftermath of Two Consecutive Super Typhoons
It has been over 50 years since Hong Kong and Macau were last hit by super typhoons in consecutive years. This unlikely series of events took place recently, in the form of Super Typhoon Hato in August 2017, and Super Typhoon Mangkhut in September 2018.
It is often perceived that wind causes the most damage during a typhoon and certainly with Hato and Mangkhut, we have seen a significant amount of claims emanating from wind damage to windows, landscaping, as well as roofing structures including solar panels, signage, and vehicles. However, the most severe financial losses suffered by our clients (particularly from Typhoon Mangkhut) concern claims where flooding from either storm surges or rain water entered properties (often from initial wind damage) and caused extensive property damage within buildings to fixtures and fittings. This has on occasion also triggered business and interruption losses.
With the Hong Kong and Macau insurance markets absorbing more than US$1 billion (across both years) of the total losses suffered by commercial entities and individuals, something has to give for renewals in 2019 and beyond. In this alert, we summarise our observations (and recommendations) in light of the impacts of these super typhoons on our clients and the insurance markets of Hong Kong and Macau.
Read more on what you can do to help your business mitigate the financial costs of these super typhoons.