Although western insurers remain relatively unaffected by the devastation left behind by December's tsunami in the Indian Ocean, local companies are calculating large payouts.
In addition to the undeveloped nature of many of the stricken areas, in the majority of these countries, earthquake risk, including tsunamis, is excluded in property insurance policies, and additional coverages, as well as life and health insurance, are quite unusual, Munich Re pointed out in its recent analysis of the tsunami's economic effects.
The toll on humanity, however, is incalculable. The waves, which reached more than 32 feet in some areas, scoured many villages off the landscape and, by mid-January, more than 162,000 were confirmed dead, although officials of the United Nations warned that figure could rise exponentially as relief workers reached remote villages and survivors succumbed to disease. Nearly a third of the confirmed fatalities were children, and the U.N. estimated that as many as 1.5 million children were affected by the Dec. 26 disaster.
Although people from all over the world have expressed a willingness to adopt children orphaned by the tsunami, the governments of most of the nine affected countries are concentrating on locating relatives or local foster care. All of the countries have increased measures to protect vulnerable children from exploitation and child trafficking. Indonesia, for example, has put a moratorium on adoptions, and children younger than 16 cannot leave the country. Surveillance at airports and seaports has been intensified.
Ten days after the mishap, a survey of insurers in India led to preliminary insured losses of 50 crore rupees ($11.387 million). Indian insurers had received few life claims, but property claims had come in from the coast, including a few hotels and resorts, the Indian online news source Sify reported. Most of the early claims were for motor vehicles that had been washed away or battered by seawater, while 300 claims had been filed under fire/flood policies, and a further 200 claims under personal accident policies.
The Thai government announced that it would work closely with insurers to speed the settlement of claims pouring in from six coastal provinces. On Jan. 13, insured losses in that country were estimated at 70.6 billion baht, or $1.8 billion, but were expected to triple that figure. Of the claims already submitted, a small proportion, 1.7 billion baht, was for life and travel insurance, while damage to insured buildings and cars had been tallied at nearly 69 billion baht.
The Indonesia Press set insured losses resulting from the tsunami at 16.8 rupiahs ($1.8 billion).
Because of southern Asia's popularity as a winter vacation destination, many Europeans and Americans also were caught in the powerful rush of water. So far, the Swedish government has confirmed 52 deaths, while a further 827 Swedes are missing. Among German tourists, 60 have been confirmed dead and more than 1,000 are unaccounted for.
In Britain, the insurance industry is debating how to pay claims on citizens of that country who remain among the 350 still missing. Although the standard waiting period in such cases is seven years, the Association of British Insurers has said that reasonable evidence, not necessarily death certificates, might be accepted. The Foreign and Commonwealth Office said in a statement that no decisions had yet been made but, due to the exceptional circumstances, resolution of the matter was considered urgent.
The European reinsurer, Munich Re, renewed its calls for action to fight climate change, which it blamed for the sharp rise in natural catastrophes. "The terrible effects spreading all around the Indian Ocean and reaching as far as the Horn of Africa are a further reminder of the global threat from natural catastrophes," wrote executive board member Stefan Heyd in the company's annual disaster report.
Despite early warning systems and more stringent building codes in developed countries, Munich Re warned that several of the world's megalopolises were vulnerable to tsunamis. In a 2003 study, the company ranked Lima, Peru, at a high risk of such a catastrophe. Chicago; Alexandria, Egypt; Jakarta, Indonesia; and the Philippine Manila-Quezon metroplex were considered at medium risk, and Singapore, Hong Kong, Istanbul, the Osaka-Kobe-Kyoto urban corridor, Tokyo, and Karachi, Pakistan, were in the third tier of potentially affected areas.
Tsunamis along the west coast of North America are not all that rare, according to the Federal Emergency Management Agency. FEMA stressed that one significant difference between tsunamis in the Indian Ocean and those in the Pacific is that the National Oceanic and Atmospheric Administration has a tsunami warning system in place and works with states and local communities to help establish local warning systems and evacuation plans.
The greatest risk to the United States is believed to be a tsunami that would be generated by an earthquake along the Cascadia fault off the coast of Washington, Oregon, and northern California. Similar to those along the northern coast of Sumatra, a Cascadian earthquake would be very large, would result in a tsunami, and would provide only a few minutes of warning. This fault last generated an estimated magnitude 9.0-9.5 earthquake and tsunami on Jan. 26, 1700.
In the last 60 years, three tsunamis have resulted in fatalities in the United States, according to FEMA. In 1946, a magnitude 7.8 earthquake near Alaska's Uminak Island razed a steel-reinforced concrete Coast Guard lighthouse on the island, killing all five occupants. The tsunami hit Hawaii five hours later, destroying the Hilo waterfront and killing 165 people. This event led to the establishment of the Pacific Tsunami Warning Center.
On May 22, 1960, a magnitude 9.5 earthquake off the coast of Chile resulted in a tsunami that affected the entire Pacific Rim, including Hilo, where it killed 61 people. Nearly four years later, on March 28, 1964, the magnitude 9.2 Anchorage earthquake generated a tsunami that caused damage in southeastern Alaska, Vancouver Island, Washington, California, and Hawaii. The tsunami reached 30 feet at Crescent City, Calif., destroying half the waterfront district and killing 120.
The Atlantic is less prone to the seismic activity that generates tsunamis. In 1755, an earthquake off Lisbon, Portugal, reportedly killed thousands along the coast of Portugal, Spain, and North Africa. Puerto Rico suffered a moderate tsunami in 1918, as a result of an offshore earthquake, while considerable damage and loss of life resulted from a Nov. 18, 1929, earthquake in the Grand Banks of Newfoundland.
Other potential hazards could trigger tsunamis, including volcanic activity along the mid-Atlantic ridge and slumping from pockets of methane hydrate recently found off the coast of South Carolina. Although the probability of Atlantic tsunamis is rare, a tsunami striking the eastern coast of the United States, or almost anywhere else along the Atlantic shoreline, would result in significant damage and loss of life, FEMA notes.
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