Tsunami: Counting the cost
Jan 02, 2005
THE economic damage caused by the December 26 earthquake is likely to run into tens of millions of pounds, aid agencies said recently.
THE economic damage caused by the December 26 earthquake is likely to run into tens of millions of pounds, aid agencies said recently. This is due to the vast devastation to properties and infrastructure across a huge area of south and south-east Asia.
Hundreds of thousands of houses have been swept away, railway lines have disappeared, and tourist hotels have been wrecked. It could be years before the full economic consequences of the disaster become clear, the agencies added. Many of the coastal regions worst affected by the tsunami –– Sri Lanka, southern India and Indonesia, are heavily reliant on tourism.
In Sri Lanka, the disaster appears to have wiped out the tourist industry, which has only recently begun to recover, following two decades of civil war. Some one million people have been displaced by the country’s worst natural disaster. Officials have already released one billion rupees (sh39.6b) to 11 districts. They have promised 10,000 rupees (sh396,825) to the relatives of each person killed. But the money is likely to do little more than to provide immediate relief. Elsewhere, it is the same grim story. The Andaman and Nicobar islands, where at least 3,000 people have died, had a growing reputation as one of the world’s best resorts for snorkelling and diving. It has proved impossible to contact some of the outlying islands; the economic consequences of the disaster are not known.
Fishing villages across the southern Indian state of Tamil Nadu have also been wiped out. Hundreds of huts of mud and thatch were destroyed. The Maldives also suffered extensive damage.
Insurers, travel agents and airlines in Britain were also counting the financial cost of the disaster yesterday, although experts have already calculated that the final cost of the tsunami is likely to be far less than the £14b (sh46.5 trillion) of insurance losses caused by this summer’s hurricanes which hit Florida and the southern United States, as fewer people in the areas affected by the huge sea surges are insured.
A spokesman for the Association of British Insurers said: “There are going to be some travel insurance claims, though they will be fairly limited, with compensation restricted mostly to medical expenses and lost baggage.â€
The bulk of claims arising from the disaster will be for property damage, but many of those affected will have insured themselves locally. As a result, it is likely to be the world’s major reinsurance firms –– which insure the insurers –– that will bear the brunt of the losses.
Swiss Re, one of the world’s largest reinsurers, expects its total claims to be less than those resulting from the US hurricanes while Hannover Re, the world’s fourth largest reinsurer, reckons its liabilities will be little more than Euros 10m (£7m) (sh23.24b). Lloyd’s of London, the world’s oldest insurance market, said yesterday it was too early to determine the extent of its exposure. The disaster comes at the end of one of the industry’s worst years. Swiss Re estimates that excluding the tsunami, natural catastrophes have caused more than $100b (sh 174 trillion)worth of damage worldwide this year and killed 21,000 people.
The lack of insurance in south-east Asia also means the impact on the region will be much greater than the losses suffered in America. Initial estimates from the World Bank are that more than $5bn of aid will be needed to help.
Shares in Europe’s largest tour operator, TUI, which owns Thomson and Lunn Poly, dipped yesterday. Many of the coastal areas affected are also important holiday destinations and with damage to many resorts such as Phuket in Thailand and luxury hotels in the Maldives, the peak season of January and February is likely to be poor.
Guardian
Hundreds of thousands of houses have been swept away, railway lines have disappeared, and tourist hotels have been wrecked. It could be years before the full economic consequences of the disaster become clear, the agencies added. Many of the coastal regions worst affected by the tsunami –– Sri Lanka, southern India and Indonesia, are heavily reliant on tourism.
In Sri Lanka, the disaster appears to have wiped out the tourist industry, which has only recently begun to recover, following two decades of civil war. Some one million people have been displaced by the country’s worst natural disaster. Officials have already released one billion rupees (sh39.6b) to 11 districts. They have promised 10,000 rupees (sh396,825) to the relatives of each person killed. But the money is likely to do little more than to provide immediate relief. Elsewhere, it is the same grim story. The Andaman and Nicobar islands, where at least 3,000 people have died, had a growing reputation as one of the world’s best resorts for snorkelling and diving. It has proved impossible to contact some of the outlying islands; the economic consequences of the disaster are not known.
Fishing villages across the southern Indian state of Tamil Nadu have also been wiped out. Hundreds of huts of mud and thatch were destroyed. The Maldives also suffered extensive damage.
Insurers, travel agents and airlines in Britain were also counting the financial cost of the disaster yesterday, although experts have already calculated that the final cost of the tsunami is likely to be far less than the £14b (sh46.5 trillion) of insurance losses caused by this summer’s hurricanes which hit Florida and the southern United States, as fewer people in the areas affected by the huge sea surges are insured.
A spokesman for the Association of British Insurers said: “There are going to be some travel insurance claims, though they will be fairly limited, with compensation restricted mostly to medical expenses and lost baggage.â€
The bulk of claims arising from the disaster will be for property damage, but many of those affected will have insured themselves locally. As a result, it is likely to be the world’s major reinsurance firms –– which insure the insurers –– that will bear the brunt of the losses.
Swiss Re, one of the world’s largest reinsurers, expects its total claims to be less than those resulting from the US hurricanes while Hannover Re, the world’s fourth largest reinsurer, reckons its liabilities will be little more than Euros 10m (£7m) (sh23.24b). Lloyd’s of London, the world’s oldest insurance market, said yesterday it was too early to determine the extent of its exposure. The disaster comes at the end of one of the industry’s worst years. Swiss Re estimates that excluding the tsunami, natural catastrophes have caused more than $100b (sh 174 trillion)worth of damage worldwide this year and killed 21,000 people.
The lack of insurance in south-east Asia also means the impact on the region will be much greater than the losses suffered in America. Initial estimates from the World Bank are that more than $5bn of aid will be needed to help.
Shares in Europe’s largest tour operator, TUI, which owns Thomson and Lunn Poly, dipped yesterday. Many of the coastal areas affected are also important holiday destinations and with damage to many resorts such as Phuket in Thailand and luxury hotels in the Maldives, the peak season of January and February is likely to be poor.
Guardian