The General Insurance Association of Malaysia (PIAM) and the Malaysian Takaful Association (MTA) have both urged the public to reconsider the importance of flood insurance, especially as the amount of flood losses is expected to increase in the future.

Speaking in a virtual panel discussion, management committee member of the MTA, Marcel Omar Papp noted that flood losses have shown an upward trend over many years. “Losses from floods have increased, not only in Malaysia, but across the globe. If we look at statistics from the past 50 years, flood losses have increased by about five times since 1970, globally,” he said.

Marcel – who is also the principal officer of Swiss Re, an insurance service provider – also stressed that moving forward, this increase is expected to continue as populations grows, climate changes, and the environment continues to degrade. “The trend, unfortunately, goes only in one direction, that is, increasing. Based on recent research from my company, just climate change alone could cause flood losses to increase by up to 65% in the next 50 years in Malaysia,” he said.

Given the statistics, Marcel urged Malaysians to place some priority in purchasing flood insurance. He also reassured the public that the premium of flood insurance will not necessarily increase because of the higher exposure.

“Naturally, if you hear that the exposure will increase by 65%, you might think ‘oh, the premium or contribution also has to increase by 65%.’ However, this is not necessarily the case because just recently PIAM has done an analysis that showed that the premium for flood extension have actually reduced by 30% in the last five years due to the fact that more people have bought the flood extension,” Marcel shared.

Meanwhile, the board of director of PIAM, Zainudin Ishak stressed the importance of getting flood coverage for motor vehicles in particular, because people drive them to various locations, hence their exposure to greater possibilities of being caught in unexpected floods. “For motor vehicles, you’ll drive it anywhere because of the mobility. So you’re not necessarily only going to stay in Damansara Heights, where there’s no flood. Who knows, on an unfortunate day, you might be in Taman Sri Muda attending a wedding, and be caught in a flood,” he said.

The board chairman of PIAM, Antony Lee also commented that flood coverage is worthwhile as it hastens the recovery and rebuilding process for flood victims – especially businesses. He said that insurance claims usually take only between seven to fourteen days to be disbursed, after which policyholders can immediately use the money to begin rebuilding their lives.

Additionally, Antony laments the trend of policyholders removing their flood coverage after a short period of time. “A lot of people will buy it, and then after the first year, when it comes to renewal, they don’t experience a flood and say ‘oh I’ll save the money, I don’t want to spend it.’ That’s not the right mindset,” he stressed, adding that Malaysians need to ultimately understand that insurance is a protection net.

• TAGS:
• Antony Lee
• Flood Insurance
• Floods
• General Insurance Association of Malaysia (PIAM)
• Malaysian Takaful Association
• Marcel Omar Papp
• Motor Vehicle Insurance
• MTA
• PIAM
• Swiss Re
• Zainudin Ishak