Event: Indian Ocean (Boxing Day) tsunami, 2004
Location: Chennai, India
Economic cost: $1.2bn for India. Insured losses were around $100m. Overall losses for Tamil Nadu ran to 2.45% of its GDP, which for 2005 was $82.7bn.
Description: A magnitude 9.0 earthquake off the west coast of Sumatra, Indonesia, triggered a series of tsunamis that hit the shores of countries around the Indian Ocean.
Damage: Nearly half the property damage was to housing, with two million people across the region left homeless. The next worst-hit sectors were fisheries, with boats and ports destroyed, and tourism, with coastal hotels affected. Chennai’s fishing port was damaged but the main port was not significantly affected because it was protected by a seawall. Properties lining Marina Beach were inundated but not damaged severely.
Insight: Insurance penetration is predicted to grow in the region hit by the tsunami, particularly in urban centres like Chennai. The Indian Ocean Tsunami Warning and Mitigation System, a UNESCO initiative launched following the 2004 tsunami, is implementing and promoting protective measures, such as building seawalls and locating buildings away from the coast.
Insurance solutions: The Lloyd's market offers cover in relation to Tsunami. Examples of this include but are not limited to: Property catastrophe reinsurance, insurance linked securities (including collateralised catastrophe reinsurance and catastrophe bonds), commercial property, flood insurance, home and contents, life and health, workers' compensation, energy onshore property, casualty, environmental liability, professional indemnity, business interruption and contingent business interruption.
Image: The wreckage of fishing boats in Nagapattinam, Tamil Nadu, following the tsunami of 26 December 2004 (Getty Images)
Sources: Asian Disaster Preparedness Center; Oxford Economics; RMS; United Nations
