The Central Meteorological Observatory issued a yellow typhoon warning at 08:00 on October 29: Typhoon "Koni," the 21st typhoon of the year, was upgraded from a strong tropical storm to a typhoon level on the morning of October 29. At 08:00, its center was located approximately 860 kilometers southeast of Taitung City, Taiwan, over the northwestern Pacific Ocean. It is expected that "Koni" will move northwest at a speed of 15 to 20 kilometers per hour, gradually intensifying, potentially reaching super typhoon strength. "Koni" is forecasted to make landfall on the southern or central part of Taiwan Island between noon and evening on the 31st, and then move northward along the coasts of Fujian and Zhejiang, where its intensity will rapidly weaken. However, due to the interactions between the subtropical high pressure and cold air systems, there is still considerable uncertainty regarding "Koni's" later path. It cannot be ruled out that "Koni" may graze the southern tip of Taiwan Island and enter the northern South China Sea, gradually approaching the southern coast of Fujian later on.

ARMs recommends you to prepare in advance, pay attention to the weather warning information, and protect the safety of life and property.

Prepare materials - equip and mobilize sufficient flood control devices.

Clearing out the drains - clear out the drainage ditches and pipes.

Reinforce the roof - reinforce the steel structure roof.

Prevent blowing down - strengthen outdoor billboards, outdoor hanging and signboards, etc.

Close the doors and windows - close doors and windows of all workshops, warehouses and offices.

Transfer materials - transfer expensive equipment and inventory to higher floor.

Pad up - pad up the equipment and inventory that are prone to water damage.

Pumping - equipped with water pump to pump water on time.

Reinforcement of temporary buildings - temporary buildings, sheds, warehouses and dormitories on the construction site shall be reinforced.

Place on the high place - keep the construction materials, machinery and equipment in high-lying areas.

Windproof Safety Check - windproof safety inspections should be carried out for overhead tower cranes, lifting machinery and scaffolding.

Protect the foundation pit - check whether the foundation pit is prepared with measures such as drainage pump, slope protection, reinforcement of soil retaining and support.

Turn off the main power supply - check the temporary power supply and distribution box for moisture resistance and turn off the main power supply.

Mud cleaning - check whether the drainage system at the construction site is effective and clear the blocked mud.

Prepare materials - prepare sufficient emergency materials for typhoon prevention, and provide a certain number of drainage pumps.

Stop construction - when a typhoon comes, stop all construction such as earthwork and foundation works to ensure the safety of personnel.

Close doors and windows - close doors and windows at home and office.

Don't go out - if the typhoon is severe stay at home.

Wear rain gear - wear rain gear when you go out. Rain gear can insulate against lightning.

Anti collapse - keep away from street lamps, poles, fences, billboards and trees.

Avoid ponding - try to avoid ponding area when you go out, to prevent falling into the passenger well, pit or electric leakage accidents.

Don't drive - if the engine stalls while driving in the water, do not restart the engine. You should leave the vehicle and move to a safe area for rescue.

According to a market report on liability insurance, awareness of this line of insurance is very low amongst consumers in China compared to Europe and the US. In China public liability accounts for less than 7% of the whole property insurance premium, while in the US it is about 40%-45% and in Europe it is about 30%.

Asian Risks Management Services founder general manager Marc Burban speaking with Asia Insurance Review said, “The degree of awareness about public liability in China, however, differs from province to province.

“In most of the urban provinces such as Beijing and Shanghai, the public liability insurance covers are relatively more prevalent. The residents there are more aware of their rights, have better information about laws and regulations and hence are more keen to seek compensation when they suffer damages from another party.”

He said, “In most of the insurance policy wordings, the establishment of the liability is based on the laws in respect of death or bodily injury to third parties, or loss of or damage to property belonging to third parties.”

In December 2020, China Banking and Insurance Regulatory Commission (CBIRC) issued the Measures for the Supervision of Liability Insurance Business to regulate this class of business and to restrict its scope of coverage. The measures are to prevent insurance companies from expanding arbitrarily the scope of their services or to use insurance services to engage in illegal or noncompliant conduct.

CBIRC said that the rapid growth of liability insurance in recent years has led to problems including poor understanding of such services among the public, non-standard market conduct and lack of standardisation in the form and quality of insurance services.

Mr Burban said, “Although, there is no mention of specific laws, generally the relevant laws for this purpose are those of the Civil Code of the People’s Republic of China adopted at the third session of the 13th National People’s Congress in 2020, especially the part 7, articles 1,164 to 1,260, which pertain to tort laws.”

In December 2019 Swiss Re China suggested to the Chinese authorities to make liability insurance, such as occupational liability insurance, public liability insurance, environmental pollution liability insurance, and product safety liability insurance, essential prerequisites for the establishment of enterprises.

According to CBIRC, the annual premium collected with respect to public liability is around one third of the total annual premium for all liability insurance lines.

Mr Burban said, “On the whole, liability insurance has achieved a significant growth over the last decade with an annual growth rate between 20%-30% from 2016 to 2019. In 2020 the total premium for all liability insurance lines was about CNY90.1bn ($14bn) and that pertaining to public liability was around CNY30bn.

“From 2020, due the pandemic, the growth rate of the insurance premium dropped from 27.5% in 2019 to 19.6.% over the last two years.”

Mr Burban said “The pandemic popped up around the Chinese New Year in 2020 and many cities were put under a strict lockdown. The most impacted businesses were food and beverages, hotel and tourism. For other businesses, the impact depended much on the region where they were operating from. This situation created a feeling of uncertainty as nobody had a clear view about what would be the situation in the months ahead. Moreover, with all operations on hold, the need for insurance and especially public liability insurance became less important from February 2020 onwards.”

Mr Burban said, “In February 2020, on a year-to-year basis the growth rate of premium income for the whole insurance business except agricultural insurance declined by 7.90% and the public liability insurance premium followed this trend.”

“After the strict lockdown was lifted and economic activities resumed, the premium income growth rebounded at a rate of 11% for the period from March to May 2020 and the public liability insurance volume followed this trend.”

Mr Burban said, “In terms of coverage with the outbreak of the coronavirus, we have seen some insurers adding a clause ‘Infectious Diseases Excluded’ which categorically excluded death, bodily injury or illness arising out of any infectious or contagious disease.

“In terms of claims, the industry did not experience an increase in number of claims incurred. It was mainly due to the slowdown of the activity especially in the food and beverage industry which usually experiences one of the highest rates of claim across all industries and also the application of the strict policy of COVID control on the business premises.”

During the period 2020-2022, the total liability insurance premium grew by 13% between 2020 and 2021 and virtually at the same rate yearon- year basis during the 12 months from October 2021 to October 2022. During this period, the share of public liability remained stable at about 3% of the total annual premium income for liability business line.

Mr Burban said, “The impact of COVID on the insurance market, and especially public liability, was more a decline in growth rate in the premium income than a decrease in premium volume collected. One of the main reasons for this is probably the low penetration rate of insurance in China. On a long-term trend basis, the development of insurance coverage is still on the rise and especially public liability.

“The need for public liability might increase as the public awareness about their rights will continue to grow. The law mentioned above is still new and came into existence only in 2020. The complete application of it may take some time and shall lead to more litigation cases in the years ahead,” Mr Burban said.

“It is difficult to assess any longterm impact of the pandemic on public liability insurance. At present the government does not require monitoring of the COVID-19 virus in open public places such as shopping malls, hotels and restaurants. As long as, there is no such requirement, businesses cannot be held liable for infection caused by someone to others in public venues. Hence, in case someone gets infected in a public venue, the person cannot lodge a claim against the business owner about it.”

Mr Burban said, “The outcome of any legal litigation may also depend on how courts construe the duty of care falling on businesses. They may consider, for instance, that there is obligation of wearing mask in public venues, a duty of monitoring the number of persons present at the venue at any given point of time. If the operator of the venue does not exercise his duty of care, he might be held liable to indemnify the damage caused to the persons infected.”

He said, “If this trend comes through, it might be challenging to insurers as they will have to cover many claims from one event or accident instead of very few which is the present situation under public liability. Reinsurance coverage will also have to be suitably adjusted to cope with the situation that could evolve.”

The impact of the COVID-19 was limited on the public liability insurance, however it might bring newer challenges in the long term with the way the civil laws apply and how the judicial system interprets them.

P&C insurers in China are gradually shifting away from their dependency on motor insurance, however, the portfolio still continues to contribute the biggest share of non-life premium income for insurers.

The motor portfolio’s contribution has shown a steady decline over the years. In 2012 motor insurance commanded a market share of 72.44% which in 2022 has touched 55.22%. In 2021 it was 56.84%. It still leads the non-life pack for P&C insurers.

In the first quarter of 2023 the motor insurance portfolio registered premium income of CNY208.7bn ($30.2bn), growth of 6% year-on-year and accounted for 44.71% of first quarter’s total non-life premiums. This was a record low ratio.

China introduced comprehensive motor insurance reforms in September 2020. According to industry sources these have led to higher compulsory motor third-party liability insurance benefits, lower premiums and reduced the additional expense rate.

The average car insurance premium for consumers was CNY2,784 as of the end of June 2022, a sharp drop of 21% compared with before the implementation of comprehensive motor reform.

Some 87% of policyholders saw their motor insurance premiums decrease, reducing the aggregate premium volume by more than CNY250bn.

With the reforms, the level of protection has also significantly improved with the total liability limit on compulsory motor coverage hiked from CNY122,000 to CNY200,000 as a reform measure. In addition, insurers have widened the scope of coverage to provide protection against risks such as glass breakage and engine flooding.

At the time of the introduction of the reforms, the Chinese regulator, China Banking and Insurance Regulatory Commission (CBIRC) had indicated that motor insurance pricing restrictions would be gradually lifted by first setting the range of independent pricing coefficient at 0.65- 1.35 and then completely liberalising pricing ‘at the right time’.

The overall aim of the reforms in the motor insurance portfolio is to promote differences in pricing and sharpen competitiveness through product innovation and service improvements.

The CBIRC in January 2023 issued the Notice on Expanding the Floating Range of the Independent Pricing Coefficient of Commercial Auto Insurance. This move expands the motor insurance pricing autonomy of property insurers from 0.65–1.35 to 0.5–1.5. As such, more competition is expected in the motor insurance market.

Some industry insiders, however, said that there are not many vehicles involved at the two extremes of the floating range, so the industry structure will not change much. In the medium and long term, larger insurers are seen to have an edge under the motor insurance pricing reforms.

The CBIRC’s remit is to determine the implementation timeframe of the pricing revision based on motor insurance market conditions in its respective jurisdiction and after soliciting views from stakeholders. The implementation was set not to be later than 1 June 2023 in principle.

The CBIRC’s bureaux are to strengthen local supervision and guide insurance companies in setting reasonably the average pricing coefficient and the upper limit on handling fees in their respective markets. At the same time, the bureaux are to continue to monitor the motor insurance market and review the insurance rates to ensure the smooth and orderly operation of the motor insurance market.

All insurers are strictly to implement various regulatory requirements relating to motor insurance, do a good job in the filing of terms and rates, actively undertake social responsibilities, optimise and ensure the supply of motor insurance products, improve the service level of motor insurance underwriting and settlement and enhance the sense of gain of motor insurance consumers.

The Insurance Association of China, the China Association of Actuaries, and China Banking & Insurance Information Technology Management Co are to cooperate in deepening the reform of auto insurance in line with their own responsibilities.

The overall aim is to promote differences in pricing by motor insurance companies and sharpen their competitiveness through product innovation and service improvements.

Analysts say that with the widening of the floating range, motor insurance premiums can be reduced by up to 23% for good drivers and increased by up to 11% for drivers who represent higher risk. However, they also point out that property insurance companies would also consider actual costs and would not merely lower their premium rates. In addition, insurers consider their solvency positions that would be affected by premium growth.

The second round of commercial motor insurance pricing was launched in April 2023. The initial launch was done in regions like Beijing, Henan, Tianjin, Shaanxi and other markets where motor insurance operations are relatively good.

Other regions were to follow by the end of May 2023. All localities were to implement the revised pricing according to local conditions, and the implementation time is not later than 1 June 2023.

In the second round of pricing revisions, the floating range of independent pricing coefficients of commercial auto insurance are 0.65- 1.35, wider than the current range of 0.5-1.5. The floating range for newenergy vehicles will not be adjusted for the time being.

With the further relaxation of independent pricing coefficients, the comprehensive reform of auto insurance continues to evolve towards full marketisation. It is also expected to ease the difficulty of purchasing motor insurance for some high-risk cases businesses given that there will be more room for insurers to price according to risk.

The expansion in the range of independent pricing coefficients for auto insurance will intensify competition among motor insurers. It may have a short-term effect on motor insurance premiums, adding to the impact of the full recovery of vehicle travel this year following the lifting of COVID-related lockdowns late last year. It is expected that the motor insurance loss rate will increase this year.

The comprehensive motor insurance reforms are aimed at reducing premiums, increasing insurance coverage and improving quality.

A new report published by the automotive and mobility solutions arm of Swiss Re will also help put the insurers in a position to improve the competitiveness of their motor books, obtain higher market share and expand profit margins.

The new report Opportunities behind complexity – A data-driven risk assessment for China’s truck insurance, says that insurers are eager to transform from traditional reactive claim settlement to proactive risk management and screening enabled by effective technologies due to the poor loss experience in the commercial vehicle insurance segment.

Causing immense damage every year.͏ Di͏d you kn͏ow th͏at the͏ average an͏n͏ual ͏economic loss͏ due ͏to natural hazards ͏in China is about $76 billio͏n?

Think about your business facing such a disaster. How would you cope? Being u͏nprepared can lead to severe financial losses. But,͏ by taking the proper steps, you can minimize the damage.

Stay with us to learn how to safeguard͏ your assets and ensure your business stays re͏silient d͏uring th͏e ty͏phoon season.͏ Rea͏d on to find out more about effective preventive measures.

Typhoons are powerful ͏storms that can cause severe damage. In Chi͏na, these stor͏ms lead to significant yearly losses. For example,͏ Typhoon Doskuri in 2͏023 st͏ruc͏k Fujian pr͏ovince and traveled up to Jiangsu. It caused heavy ͏rains and floods in He͏bei province, 600 to 900 km away. The direct economic loss in Hebei al͏one was $13.2 billion.

Being informed is one of the most crucial steps in preparing for a t͏yphoon.͏ Weather warnings provide vital information about incoming storms. By paying attention to these ͏warnings, you can take timely͏ actions to protect your life and property. Monit͏or r͏eliable wea͏the͏r sour͏ces a͏n͏d h͏eed an͏y advisor͏ies or evacuation orders. Acting on these warnings can save lives and significantly reduce property damage.

Being prepared is the best way to reduce damage from a typhoon. Here are some essential preventive measures:

1͏ • S͏tock Up on Necessary Materials and Eq͏uipmen

Start by preparing the necessary materials and equipment. Flood͏ barriers and sandbags can help keep water out of your bu͏ildings. Place them around doors and low window͏s. Ensure you have batteries, flashlights,͏ first aid kits, and enough food and water for everyone. This preparat͏ion͏ ensures you can respond quickly and effectively when a typh͏oon hits.

2 • Reinforce Your Infrastructure

Next, focus on reinforcing your infrastruc͏ture. ͏Inspect your roofs for͏ weak spots and͏ repair any damages. Strong roo͏fs are less likely to be damage͏d by stro͏ng ͏winds and heavy rai͏n.͏ Similarly, ensure billboards, signb͏oards, and other outdoor struc͏t͏ures are͏ fi͏r͏mly anchored. These can become dangerous if they are not properly secured.

3 • Secure Your Pre͏mises

Securing your ͏premises is another vital step. During a typhoon, keep all doors and wind͏ows shut to prevent water and debris from en͏tering. Move valuable equipment and inventory to higher floors.͏ Place these items on pallets or shelves to keep them off the ground and reduce the risk of water damage.

4 • Ensur͏e͏ Effective Drainage and Water Control

Adequate drainage and water control can significantly mit͏igate the impact of a typho͏on. Make sure all draina͏ge ditches and pipes are clear of debris. This helps water flow away from your property. Have water pumps ready to remove a͏ny͏ accumulat͏ed water quickly—this can prevent fl͏ooding and water damage to your property.

5 • Create an Emergency Response Plan

Creating an emergency response plan is crucial for handling typhoon situations effectively. Develop a clear plan that outlines steps to take before, during,͏ and after a typhoon. Assign roles and responsibilities to your team members. Conduct regular drills to ensure everyone knows what to do. Includ͏e em͏erge͏ncy contact ͏numbers and evacuat͏i͏on routes ͏in y͏our plan. This preparation can save lives and minimize damage during a typhoon.

Constructio͏n sites are particularly vulnerable during typhoons due to their open structure͏s and loose m͏ateri͏als. Reinforce temporary buildings, sh͏eds,͏ warehouses, and dormito͏ries to prevent them from ͏collapsin͏g. Conduct safety inspections for cranes, li͏ft͏ing machines, and scaffolding to ensure they can w͏i͏ths͏tan͏d st͏rong winds.

Prot͏ecting foundation pits is also essential.͏ Ensure these pits have drainag͏e pumps and s͏lope protections to pr͏ev͏ent landslides an͏d flooding. Turn off the main power supply and check tempor͏ary power sources to avoid electrical ha͏zar͏ds. Clearing mud and debris from drainage systems can also help prevent blockages and water accumulation.

When a typhoon͏ approaches, halt͏ all construction activities to ensure the safety of your workers.͏ This reduces the risk of acci͏dents and ͏all͏o͏ws for a more controlled response to the storm.

Perso͏nal safety is just as important as protecting your business. ͏At home and in the off͏ice, make sure all doors and window͏s are sec͏urely closed. This prevents water and debris from entering and causing harm. Stay indoors to avoid the dangers of strong winds and flying objects during severe weather.

Typhoons can cause severe damage,͏ but being prepared can help reduce the risks. Following preventive measures can protect your property and business during the typhoon season in China. Stay i͏nformed, ͏take͏ action, and ensure͏ the safety of͏ everyone involved.