(Guest Article) Flood Insurance: Highlights of 2021
Been a long time since I have an update! Today, here’s a guest article that is quite relevant for Malaysians for my dear readers to enjoy whilst I start conjuring up my article on house renovation!
Excited to share with you all on my journey soon! It’s long… so expect a multi-part series.
Flood strongly impacts victims, and the damage caused is unacceptably massive. Flood risk is
typically covered by property and fire insurance, and it is the product of the vulnerability to
flooding multiplied by the total value of the assets at risk due to the flood. Having flood
insurance is highly significant as it can provide assistance if your home or assets are affected by
a flood.
There are a few contributing factors that lead to flooding. One of such examples is man-made
factors – which caused 14 major floods taking place between 1998-2021 in Malaysia.
Additionally, floods are also caused by the heavy monsoon season. The Northeast and Southwest
monsoons have a significant impact on the amount of rainfalls, with yearly average rainfall in
Peninsular Malaysia being 2420mm, 2630mm in Sabah, and Sarawak with the highest record,
3830mm.
Top Two Worst Floods in Malaysiaโs History
- Tropical Depression 29W
The tropical depression happened in 2021, affecting our country with excessive flooding, leading
to at least 50 deaths and thousands of people evacuating. According to Malaysian Insurance
Highlights 2021, over 100,000 victims were impacted by the torrential rains in December 2021
and January 2022. In December 27, 48 deaths was reported, and it is the highest in the history
of flood disasters in Malaysia. Many said that the high number of casualties โ with most of them in Selangor especially in the Klang Valley โ was because the flood was unexpected and alerts
from authorities are insufficient.
- 2014 Peninsular Malaysia Flood
The 2014 flood caused by the Northeast monsoon is one of the worst flood incidents that had
ever affected Malaysia. About 184,000 hectares of palm plantations were damaged, resulting in a
RM2.9 billion revenue loss. Moreover, it impacted 250,000 people in Kelantan and destroyed
2,000 permanent homes, necessitating complete construction.
Why is having an insurance important to mitigate flood-related damages?
Flood insurance enables the repair of flood-damaged property without using their funds or
incurring debt. With flood affecting populations, it is projected that there will be rising demand
for flood insurance in the future. When flood hit Malaysia, the need for flood insurance renewals
reached 60%. This is because, to completely dry out, restoring and repairing homes can be
costly. Hence, having insurance to mitigate flood damages seems to be a reasonable option.
Malaysian Insurance Highlights 2021 accentuates the need to address the protection gap as flood
risk increases, where the demand for flood cover is influenced by the governmentโs support of
the countryโs low-income segment for the loss caused by a disaster.
Malaysian Reinsurance Berhad (Malaysian Re) is Malaysiaโs national reinsurer. The institution
underwrites all classes of general reinsurance business and general retakaful business, with an
extensive business portfolio. Malaysian Insurance Highlights is a thought leadership publication
produced by Malaysian Re the nationโs insurance and takaful markets, combining a rigorous
analysis of the hard data with in-depth executive and senior professional interviews. Head over
to https://www.malaysian-re.com.my/our-insights for more information about Malaysian Reโs
reinsurance services.
Article derived from:
Malaysian Insurance Highlights 2021
https://www.malaysian-re.com.my/api/uploads/MIH_22_final_a6da7cf755.pdf
