Daniela GHETU, Editorial Director, XPRIMM Publications

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Daniela GHETU, Editorial Director, XPRIMM
Publications

• Property insurance in the Caucasus area - 2014

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With global warming of close to 1.5C above
pre-industrial times already locked in, and a 40
chance to exceed 4C before 2100 if no further
action is taken, weather extremes considered as
occurring every 100 years at most may soon become
the NEW NORMAL. Turn Down the Heat
Confronting the New Climate Normal, The World
Bank
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Commonwealth of Independent StatesCountry
features
Caucasus 17.15 million people 3.8 million
households arable land 15.4 of total area
Central Asia 67.82 million people over 7
million households arable land 8 of total area

  Area Population Urban population Households Dwellings Arable land Share of agriculture in GDP
  sq km millions of total millions millions of total land use
Armenia 29,743 3.29 62.80 0.78 0.86 15.75 21.90
Azerbaijan 86,600 9.38 54.40 1.99 1.86 22.95 5.70
Belarus 207,600 9.47 76.30 3.86 3.89 27.21 7.30
Georgia 69,700 4.47 53.50 1.03 na 5.76 9.10
Kazakhstan 2,724,900 17.42 53.30 4.15 na 8.48 4.90
Kyrgyzstan 199,951 5.70 35.60 1.11 na 6.66 19.30
Moldova 33,851 3.56 44.90 1.13 1.08 55.20 15.70
Russia 17,098,242 143.70 73.90 52.71 58.00 7.31 4.00
Tajikistan 143,100 8.30 26.70 1.20 na 6.14 27.20
Turkmenistan 488,100 5.80 49.70 na na 4.13 13.20
Ukraine 603,550 42.78 69.50 16.98 19.40 56.13 12.10
Uzbekistan 447,400 30.60 36.30 na 5.63 10.23 18.50
Sources National Statistics Officies, CIA World Factbook 2015 Sources National Statistics Officies, CIA World Factbook 2015 Sources National Statistics Officies, CIA World Factbook 2015 Sources National Statistics Officies, CIA World Factbook 2015 Sources National Statistics Officies, CIA World Factbook 2015
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CENTRAL ASIA AND CAUCASUSCurrent risk profile
Earthquake Floods Drought Landslide
Azerbaijan X XX X X
Armenia XXX XX X
Georgia XX XX X X
Kazakhstan XXX XXX X
Kyrgyzstan XXX XX XX
Tajikistan XXX XXX X XXX
Turkmenistan XXX XX
Uzbekistan XXX X X X
Earthquakes are the dominant disaster risk
followed by floods, landslides and droughts
Higher temperatures ? melting glaciers ?
increased flooding risk in the coming years ?
water reserves shortage after a few decades ?
prolonged drought
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CENTRAL ASIA AND CAUCASUSReasons of concern
Earthquakes are the dominant disaster - major
cities in Central Asia and Southern Caucasus are
especially at risk.
The energy corridors, as the Baku-Tbilisi-Ceyhan
(BTC) Crude Oil Pipeline and the
Baku-Tbilisi-Erzurum (BTE) Natural Gas Pipeline
crossing territories with high earthquake
exposure There is a 40 chance of a powerful
earthquake striking close to a major city in the
region by 2016. (The World Bank)
Floods significant risk across the region
large population concentrations along the river
valleys for agricultural reasons -gt significant
number of people at risk agricultural
losses Drought significant risk across the
region agricultural losses (significant share
in the GDP)
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CENTRAL ASIA AND CAUCASUSEconomic Loss Potential
Disaster Risk Mitigation and Adaptation
Programme, The World Bank
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How large is the coverage GAP?

• Participation of the insurance industry
  worldwide to the Nat Cat losses is still too
  small
• less than 30 of losses are insured (Swiss Re)

10 years' average economic losses
10 years' average insured losses
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Azerbaijan
Share of agriculture in GDP 5.7 Share of
agriculture in labor force 38.3 Number of
dwellings 1,861,000
PROPERTY INSURANCE STATISTICS PROPERTY INSURANCE STATISTICS PROPERTY INSURANCE STATISTICS PROPERTY INSURANCE STATISTICS
  Non-life GWP (in EUR m) Non-life GWP (in EUR m) Non-life GWP (in EUR m) Non-life GWP (in EUR m) Non-life claims (in EUR m) Non-life claims (in EUR m) Non-life claims (in EUR m) Non-life claims (in EUR m)
  Total Fire other perils (V) Immovable property (C) Agricultural ins. (V) Total Fire other perils (V) Immovable property (C) Agricultural ins. (V)
FY2013 312.52 44.26 12.32 0.93 110.31 2.94 1.34 0.52
FY2014 340.46 38.23 18.30 2.60 135.01 8.02 2.54 0.51
14/13 8.94 -13.62 48.63 179.00 22.39 173.14 89.10 -2.43
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Armenia
Share of agriculture in GDP 21.9 Share of
agriculture in labor force 44.2 Number of
dwellings 862,025
PROPERTY INSURANCE STATISTICS PROPERTY INSURANCE STATISTICS PROPERTY INSURANCE STATISTICS
  Non-life GWP (in EUR m) Non-life GWP (in EUR m) Non-life GWP (in EUR m) Non-life claims (in EUR m) Non-life claims (in EUR m) Non-life claims (in EUR m)
  Total Fire other perils (V) Damages to property (V) Total Fire other perils (V) Damages to property (V)
FY2013 61.68 3.82 0.43 32.03 0.36 0.01
FY2014 52.05 3.54 0.50 38.13 8.36 0.01
14/13 -15.61 -7.12 16.47 19.04 2241.41 64.52
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Georgia
Share of agriculture in GDP 9.1 Share of
agriculture in labor force 55.6 Number of
households 1,025,829
PROPERTY INSURANCE STATISTICS PROPERTY INSURANCE STATISTICS PROPERTY INSURANCE STATISTICS
  Non-life GWP (in EUR m) Non-life GWP (in EUR m) Non-life claims (in EUR m) Non-life claims (in EUR m)
  Total Property insurance (V) Total Property insurance (V)
FY2013 191.90 17.22 161.05 1.11
FY2014 126.23 28.57 95.18 1.92
14/13 -34.22 65.92 -40.90 74.01
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Kazakhstan
Share of agriculture in GDP 4.9 Share of
agriculture in labor force 25.89 Number of
households 4,152,740
PROPERTY INSURANCE STATISTICS PROPERTY INSURANCE STATISTICS PROPERTY INSURANCE STATISTICS
  Non-life GWP (in EUR m) Non-life GWP (in EUR m) Non-life GWP (in EUR m) Non-life claims (in EUR m) Non-life claims (in EUR m) Non-life claims (in EUR m)
  Total Fire other perils (V) Agricultural ins. (V) Total Fire other perils (V) Agricultural ins. (V)
FY2013 1,054.40 217.18 2.27 246.88 44.33 1.46
FY2014 987.22 233.86 2.17 276.28 30.61 4.80
14/13 -6.37 7.68 -4.25 11.91 -30.94 228.56
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Belarus
Share of agriculture in GDP 7.3 Share of
agriculture in labor force 9.4 Number of
dwellings 3,893,638
PROPERTY INSURANCE STATISTICS PROPERTY INSURANCE STATISTICS PROPERTY INSURANCE STATISTICS PROPERTY INSURANCE STATISTICS
  Non-life GWP (in EUR m) Non-life GWP (in EUR m) Non-life GWP (in EUR m) Non-life GWP (in EUR m) Non-life GWP (in EUR m)   Non-life claims (in EUR m) Non-life claims (in EUR m) Non-life claims (in EUR m) Non-life claims (in EUR m) Non-life claims (in EUR m) Non-life claims (in EUR m) Non-life claims (in EUR m) Non-life claims (in EUR m)
  Total Prop. of legal entities (v) Prop. of individuals (v) Prop. of individuals (v) Home insurance (c) State subsidized agro ins. (c) Total Total Prop. of legal entities (v) Prop. of legal entities (v) Prop. of individuals (v) Prop. of individuals (v) Home insurance (c) State subsidized agro ins. (c)
FY2013 466.02 73.00 69.23 69.23 5.73 20.50 205.25 205.25 31.55 31.55 33.91 33.91 2.25 11.96
FY2014 475.10 62.82 62.92 62.92 5.78 14.94 217.74 217.74 33.81 33.81 33.62 33.62 2.45 6.78
14/13 1.95 -13.94 -9.11 -9.11 0.87 -27.11 6.09 6.09 7.17 7.17 -0.86 -0.86 9.17 -43.33
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Russia
Share of agriculture in GDP 4 Share of
agriculture in labor force 9.7 Number of
dwellings 58,000,000
PROPERTY INSURANCE STATISTICS PROPERTY INSURANCE STATISTICS PROPERTY INSURANCE STATISTICS PROPERTY INSURANCE STATISTICS
  Non-life GWP (in EUR m) Non-life GWP (in EUR m) Non-life GWP (in EUR m) Non-life GWP (in EUR m) Non-life claims (in EUR m) Non-life claims (in EUR m) Non-life claims (in EUR m) Non-life claims (in EUR m)
  Total Real estate - legal entities (V) Real estate - individuals (V) Agricultural insurance (V) Total Real estate - legal entities (V) Real estate - individuals (V) Agricultural insurance (V)
FY2013 18,233.82 2,319.00 663.71 317.70 9,082.43 554.25 127.56 128.17
FY2014 12,865.19 1,641.34 564.99 244.37 6,702.11 464.24 92.49 79.36
14/13 -29.44 -29.22 -14.87 -23.08 -26.21 -16.24 -27.50 -38.08
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Regional summary risks enhancing factors

• 2/3 of the regions population is concentrated in
  the southern area, highly prone to all kinds of
  hazards, exacerbated by the diverse geography and
  extreme weather conditions - coupled with climate
  change.
• Many capital cities nad large cities located in
  high to very high hazard areas.
• The energy corridors are crossing territories
  with high earthquake exposure.
• Droughts the second major risk in Caucasus
  27 of Armenia and 17 of Azerbaijan fall under
  the high drought hazard category (the 2000
  drought in Central and south-west Asia and the
  Caucasus region affected about 60 million people)

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Regional summary risks enhancing factors

• Low financial literacy of people unadequate
  perception of risks
• Insufficient insurance protection of dwellings,
  although mandatory in some countries
• Nat Cat insurance penetration even lower
• Low penetration of the property insurance lines,
  especially agricultural insurance
• With few exceptions, poor Nat Cat risks transfer
  mechanisms inadequate protection of households
  and small enterprises

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Housing protection improvement needed

• insurance protection
• risk mitigation measures

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Agricultural insurance development needed across
the entire region