Populous Chinese province kicks off disaster insurance trials

It caused billions of dollars in economic losses and hundreds of fatalities, spurring officials to seek greater protection against natural catastrophes. Under the Henan trial programme, the history, probability of disasters and local conditions of the selected cities will be taken into account when negotiating with insurance agencies to determine a unified insurance plan.

China's third-most populous province Henan will launch pilot programmes for catastrophe insurance in six cities that were the hardest hit by historic floods last summer. Aside from its capital Zhengzhou, trials are to be set up in the cities Anyang, Xinxiang, Hebi, Zhoukou and Xinyang, the provincial government said in a statement on Monday.

Local governments in typhoon-prone areas on the Chinese coast have taken on catastrophe insurance, but such insurance is largely still in its infancy in China, partly due to a lack of a central government push. However, the devastating 2021 floods in Henan, a province of almost 100 million people, was a wakeup call for local officials. It caused billions of dollars in economic losses and hundreds of fatalities, spurring officials to seek greater protection against natural catastrophes.

Under the Henan trial programme, the history, probability of disasters and local conditions of the selected cities will be taken into account when negotiating with insurance agencies to determine a unified insurance plan. The cities are encouraged to boost insurance coverage as much as their financial resources allow, the Henan government said.

Henan said it had selected cities with the highest risk and which were severely affected by rainstorms and floods last year as the first batch in the pilot programme. It will later expand the coverage areas and the scope of protection based on the situation, and gradually cover the whole province.

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