Asia-Pacific faces a persistent natural catastrophe protection gap despite industry efforts to expand coverage, according to Howden Re executives who discussed the region’s vulnerability to disasters.
Andy Souter, head of Asia-Pacific at Howden Re, said preparedness varies widely across the region. “Preparedness determines vulnerability,” Souter said. “Japan’s long-standing investments in quake-resistant construction and storm defenses make it one of the most resilient markets globally. Elsewhere, however, population growth, rapid urbanization, and socio-economic pressures leave communities exposed.”
The protection gap stems primarily from accessibility and understanding rather than lack of capacity, Souter added. “The protection gap is still wide, and not for lack of capacity,” he said. “Accessibility and understanding are the main barriers.”
Emily Lo, head of analytics for Asia at Howden Re, emphasized the region’s broad exposure to natural disasters. “The exposure is broad,” Lo said. “Earthquakes, typhoons, floods and tsunamis all present major threats, and each peril interacts with others in complex ways.”
Lo said systematic approaches to preparedness yield measurable results. “Preparedness works best when it’s systematic, not selective,” she said. “Enforcing resilient construction standards, embedding automatic response triggers for surge or rainfall thresholds, and ensuring that insurers and governments hold capital for one-in-200-year events all make a measurable difference.”
Recent events have demonstrated how preparation affects outcomes. Super Typhoon Ragasa’s impact on Hong Kong showed improved resilience compared to previous storms, according to Myrto Papaspiliou, head of international catastrophe model research at Howden Re.
“In Hong Kong, stronger coastal defences, better coordination, and clearer public alerts meant the city withstood a number 10 signal with less damage than Typhoon Mangkhut,” Papaspiliou said.
Parametric insurance products offer potential solutions for closing the protection gap, particularly for perils requiring fast payouts. Regional initiatives, including the Southeast Asia Disaster Risk Insurance Facility and the Pacific Catastrophe Risk Insurance Company, help spread risk across lower-income markets.
Papaspiliou said lessons from past catastrophes continue to guide resilience strategies. “Every catastrophe is a lesson,” she said. “From Kobe and Christchurch to Ragasa and Morakot, the regions that learn, adapt and institutionalize those lessons are the ones that recover stronger.”
Data innovation through machine learning and satellite analytics now enables loss quantification within hours of disasters, accelerating both humanitarian and insurance responses, he noted.
How can insurers work to make catastrophe protection more accessible across APAC? Share your insights in the comments below.
