• In May 2026, southern and central China experienced exceptionally heavy rainfall, which triggered widespread flooding, and caused multiple fatalities and displacement of tens of thousands of people. Several provinces also grappled with significant disruption to infrastructure, agriculture and supply chains.
• The events are following the pattern as China has experienced several major flood disasters in recent years, often linked to the summer monsoon and tropical cyclone season. Between June and August 2025, for example, around 28,700 houses were destroyed, 362,600 were damaged, and more than 2.6 million hectares of cropland were affected by floods.
• Despite the scale and recurrence of flood losses, insurance penetration for flood risk in China remains limited. During the July 2023 heavy rainfall event in the Haihe River basin, for example, direct economic losses reached 166 billion yuan, yet only 7.6% of losses were insured, highlighting a substantial protection gap.
• The report says that the public’s willingness to purchase flood insurance and the insurance companies’ willingness to offer flood insurance are relatively low contributing to a persistently wide protection gap in a country that continues to face evolving flood and cyclone risk.
• More broadly, China is estimated to face a catastrophe protection gap of around 90% … 66% of China’s population and 80% of its GDP is threatened by floods.
• In 2026, while China’s non‑life insurance sector is performing well financially, the reinsurance cession ratio for catastrophe risk remains low at around 10%, substantially below levels observed in more mature insurance markets.

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