China tops the world ranking in terms of flood risk, followed by other emerging economies such as Brazil, Russia and India, because of their fast economic growth and corresponding increase in flooding exposure in recent years, a report by Swiss Reinsurance Co (Swiss Re) showed yesterday.
The study, prompted by major floods in Thailand last year, aims to identify other emerging markets comparable to the Southeast Asian country, that are known to be prone to flooding, but the size of the losses still came as a big shock to the insurance industry, the report found.
“The Thailand flood is [sic] a textbook example of how a natural catastrophe event can cause extreme property losses” which were valued at US$12 billion and with claims still unfolding, Swiss Re chief economist on Asia Clarence Wong (黃碩輝) told a media briefing in Taipei.
The natural disaster is by far the largest insured loss, costing more than 15 times the country’s property premiums and about twice its total non-life premiums, Wong said, citing the report.
The economist attributed the unprecedented loss to the insurance industry’s tendency to underestimate risk exposures and related business disruptions.
The industry had an inadequate grasp of the amount of exposure that had built up in Thailand and originated from foreign companies diverting their manufacturing operations in the past few years, Wong said.
The lesson warranted a study to identify other hidden “hot spots,” with China discovered to have the highest flood risk based on a combination of factors, including real GDP growth, foreign direct investment as a share of GDP and flood risk indices per country, the report said.
Thailand ranks seventh and Vietnam, in 10th place, may move up as it is expected to be the destination for Japanese companies relocating their operations from Thailand, the report indicated.
Taiwanese firms have significant exposures in both China and Vietnam and are under pressure for higher insurance charges to hedge against business interruption risks, said Anna Lee (李安樺), a Hong Kong-based property division executive.
“The risks are likely to deepen in the foreseeable future as tightening capital requirements may drive some peers to exit the market amid the European debt problems,” Lee said.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to