Just 5% of Peru El Niño damage covered by insurance

Just 5% of the damage caused by floods and heavy rain in Peru resulting from the so-called coastal El Niño weather phenomenon is covered by insurance, estimates Eduardo Morón, president of the local insurers association Apeseg.

As of April 9, there were 3,500 insurance claims for US$148mn, which represent just 2% of the damage reported by emergency agency COEN, local media reported.

The recovery of Peruvian economy would be much faster if there was higher insurance coverage, according to Morón, who projected that total costs will finally reach US$6.7bn.

At a global level the coverage for natural catastrophes reaches 30% of damage.

The budget for reconstruction allocated by the central government – 10bn soles (US$3.1bn) – would only cover 40% of the estimated damage, meaning part of the damaged buildings and infrastructure may not be reconstructed, Morón was quoted as saying by local news outlet RPP Noticias.

Five insurers – La Positiva, Pacífico, Rímac, Mapfre, Chubb – account for all the claims.