Asia-Pacific suffered $73 billion in losses from natural disasters last year, yet only $9 billion of that amount was covered by insurance, making.
The region one of the least insured in the world against climate-related disasters, according to German reinsurer Munich Re. By comparison, roughly 70 per cent of North America’s $133 billion in disaster losses were insured. The region was also home to the world’s second-costliest disaster in 2025: a 7.7-magnitude earthquake in central Myanmar that caused an estimated $12 billion in damage but saw only $1.5 billion insured. It was also the deadliest disaster of the year, claiming approximately 4,500 lives.
Insurance coverage remains extremely low in many lower-income Asian countries. Munich Re noted that in Myanmar, Laos, Cambodia, and the Philippines, coverage often falls below 5 per cent. One major barrier is the lack of reliable climate and disaster data, which makes it difficult for insurers to assess risk and price policies accurately.
“In data-poor environments, international insurers struggle to enter markets or work effectively with governments,” said Benedikt Signer, Executive Director of SEADRIF Insurance Company. He added that governments sometimes view insurance as a poor investment, since payouts are intangible and only realized after a disaster.
Low coverage poses serious economic risks. Southeast Asia is a key global supply-chain hub, producing about 30 per cent of the world’s rice and over 80 per cent of global palm oil. Disasters that damage crops, reduce yields, or disrupt logistics can ripple through both local and international markets.
For vulnerable communities, the lack of insurance can be catastrophic. Families without coverage often struggle to rebuild homes or livelihoods, sometimes being forced to sell assets, cut consumption, or withdraw children from school, Signer noted.
Parametric insurance schemes such as those provided by Singapore-based SEADRIF have shown promise. In August 2023, the company paid $1.5 million to Laos within a day of major floods, and followed with $2 million after multiple floods in 2025.
Experts say that alongside insurance, governments must also invest in physical defences, including seawalls and flood barriers, and strengthen partnerships with institutions such as the World Bank and Asian Development Bank to reduce climate vulnerability across the region.
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