NU Online News Service, Aug. 12, 3:38 p.m. EDT

Severe flooding in China this summer has caused massivedestruction and tens of billions of dollars in damage, but isunlikely to have a large impact on the insurance industry, GuyCarpenter & Company's Instrat unit said.

Guy Carpenter issued a report, "Floods in China: August 2010,"and said that flooding has left more than 2,100 people dead ormissing country-wide and has caused damage--including thedestruction of homes and infrastructure--across 28 provinces andregions of China.

As of Aug. 6, Guy Carpenter said the Chinese Ministry of CivilAffairs estimated economic losses from these flood-relateddisasters at around 275 billion Yuan ($40.6 billion at currentexchange rate).

But despite huge economic losses, insured losses will likely besmall.

Guy Carpenter cited a recent study by Munich Re and said thatalthough the 10 largest floods in China since 1980 have causedtotal economic losses of $135 billion, the insured losses have onlybeen 1 to 2 percent of that amount.

The reasons for this, according to the report, are due to lowinsurance penetration in rural areas of China as well as thecountry's concerted effort to protect economic, rather than humanassets from flooding.

Guy Carpenter noted that flooding has been triggered by weeks ofunusually severe monsoonal rains that have caused landslides andoverflowing rivers.

Guy Carpenter also cited the Chinese Flood Protection Scheme andsaid that so far this summer, record-high water levels have beenrecorded for 25 rivers, with one such river reaching its highestlevel in 30 years.

Current flooding is reported to be the worst China hasexperienced since 1998, when more than 4,000 people died and 18million people were displaced.