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Typhoon Season Preparation and Loss Mitigation

Risk Control and Claims Advocacy|Risk & Analytics|Corporate Risk Tools and Technology
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June 25, 2020

A 2020 typhoon risk advisory notice for Hong Kong and Macau organisations

The devastation caused by Super Typhoons Hato and Mangkhut in 2017 and 2018 respectively is still fresh in the memory of most business owners in Hong Kong and Macau, and is still impacting related insurance coverage.

Despite no significant typhoon events in 2019, as meteorological forecasters predict multiple typhoon related events in 2020, organisations in the region should review and update their typhoon preparation and loss mitigation measures, as well as give due consideration to current workplace pandemic controls.

Recent Tropical Storm Activity

Tropical storm activity within the region during 2019 was relatively mild compared to previous years, with the Hong Kong Observatory recording five tropical storm events, all below typhoon strength, for the year. However, in 2017/2018 the situation was vastly different, with two super typhoons being recorded in consecutive years.

2020 Forecast Summary

As a result of climate change, extreme precipitation events have been more frequent and the hourly rainfall record of the Hong Kong Observatory has been broken several times in recent decades. On 20 May 2020, cyclone Amphan struck Eastern India and Bangladesh causing over 100 fatalities and over US$13b in damages. In this context, both the Hong Kong Observatory and the Macao Meteorological and Geophysical Bureau predict between four and seven tropical storm events for the region this year.

Building and Landscape Damage Mitigation Measures

When reviewing and updating their typhoon preparation and loss mitigation measures, it is important for organisations to note that each of the following stages should be well attended to – pre-typhoon planning, as the typhoon approaches, during the typhoon, and after the typhoon. Our Typhoon Season Preparation and Loss Mitigation advisory outlines the key elements of the review.

Claims Considerations

For post-typhoon loss or damage, it is a duty of the insured to take all reasonable steps to reduce the effects of the loss and prevent any further damage as far as possible. Under the general conditions of property insurance policies, the insured is required to report any claim to their insurer as soon as practicable. In addition, the insured party has an obligation to cooperate with the insurance company and their appointed loss adjusters to process related claims.

A list of actions that the insured party should adopt in order to facilitate the claims process are listed in our Typhoon Season Preparation and Loss Mitigation advisory notice. In the document we also discuss the impact of COVID-19 on insurance coverage, and how the use of appropriate technologies helps mitigate the severity of typhoon losses.

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