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‘Typhoons drive up the demand for insurance’
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Posted on Oct 25 2019
Last Monday, the Marianas was lucky to have been spared by Typhoon Bualoi, the second typhoon to hit the CNMI in just two weeks. Just a week before that, Super Typhoon Hagibis also tracked through the CNMI on its destructive path to Japan but, again, sparing the CNMI.
Early this year, the Trump administration announced plans to overhaul the National Flood Insurance Program, that, beginning in October 2020, aims to tie premiums to the actual flood risk that homes nationwide could face.
As storms continue to affect the islands, and with increased frequencies and rapid intensification, insurance companies are also taking note of sea level rise, with demand for flood insurance in the CNMI also getting higher.
Century Insurance Co. Ltd. general manager Magtanggol H. Corpus attested that the insurance industry is affected by these climate extremes.
Corpus explained that high water, and even tidal waves, are covered by insurance. People have to pay a certain premium as a typhoon is different from a flood. Flood is a different category and has an additional premium.
“The insurance industry is affected. Imagine four typhoons in the last three years,” Corpus said. “The demand got higher after Yutu. There are people who became conscious about storms. Sometimes it’s healthy, because people tend to be lax but we don’t want that thing to happen on a very small interval of time.”
There is a correlation between flooding brought about the climate change/sea level rise and the demand for flood insurance.
“Especially if you are a believer in global warming,” Corpus said. “I have attended at least three seminars in Singapore and a couple in Australia and I would say 80% of insurers worldwide believe in global warming. They do believe.”
