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Maha Kumbh Mela: World's Largest Gathering Begins in India
Deutsche Welle
13 Jan 2025, 15:26
Photo: Anushree Fadnavis/REUTERS
The Hindu festival Maha Kumbh Mela kicked off in Prayagraj in Uttar Pradesh, India on Monday. The event takes place once every 12 years in the city and draws hundreds of millions of people across six weeks.
Modi billboards plastered across festival location
Ramesh and Manju, a farmer couple from the eastern state of Odisha saved up to attend the mela. "I consider my wife a goddess who convinced me to take this holy journey," Ramesh told DW's Adil Bhat.
Bhat said the tent area is plastered with billboards of Prime Minister Narendra Modi and Uttar Pradesh Chief Minister Yogi Adityanath. But Ramesh does not mind the political undertones of the festival, Bhat said.
India expects an economic boost from the event
India spent around 7 billion rupees ($81 million, €79 million) on setting up the event. Government estimates say the event could boost the economy by 2 trillion rupees if every one of the 400 million expected visitors spends an average of 5,000 rupees per day, Indian media reported.
Indian news agency IANS was even more optimistic, citing industry estimates that put per-person expenditure up to 10,000 rupees per day.
A food and hospitality boom is expected with homestays, tents and food courts popping up across the area.
Constant announcements about separated family members
Police have arranged for centers to reunite people who get separated from their family members at the event. DW's Charu Kartikeya has been on the ground and said that the centers seem to be very busy.
"We have been here for about 4 hours now and these loudspeakers announcing the names of those who got separated from their families have not gone silent for even a minute," Kartikeya said.
"A tall tower and a microphone have been set up near the police assistance booth where people are coming to make the announcements and asking their near and dear ones to assemble near the tower."
"Officials told us that there was a long queue in the early hours. Only now has the queue dwindled as most of those who got lost were reunited with their families," he added.
Naga Sadhus — the naked ascetics dipping into icy waters
The Maha Kumbh Mela draws many Hindu ascetics and saints, including the Naga Sadhus. These saints are a prominent sight at the mela, as they come naked and smeared in ash, sporting dreadlocks and wearing jewellery made from "rudraksha," a naturally occurring dry fruit.
With chilly temperatures in Prayagraj, many devotees shiver to take the holy dip in the waters. But Naga Sadhus seem comfortable and rarely show signs of feeling cold.
It is believed that they can regulate their body temperature through yoga and breathing techniques. The ash used to cover their bodies also helps protect them from the cold.
Maha Kumbh Mela kicks off
The Maha Kumbh Mela began in Prayagraj in India's Uttar Pradesh state on Monday, as millions gathered for the Hindu festival.
Tens of thousands of Hindus dipped into freezing waters at the confluence of holy rivers Ganges, Yamuna and Saraswati, also known as the "Triveni Sangam."
"A very special day for crores of people who cherish Bharatiya values and culture!" Prime Minister Narendra Modi posted on X.
The six-week festival was inaugurated by Hindu monk and Uttar Pradesh Chief Minister Yogi Adityanath on Sunday. "All the revered saints, Kalpvasis and devotees who have come to experience unity in diversity, to meditate and take a holy bath at the confluence of faith and modernity are heartily welcomed. May Maa Ganga fulfil all your wishes," he said.
About 40,000 security forces are on duty to safeguard and manage the crowds. Authorities are also deploying surveillance cameras with AI capabilities.
About 2.5 million people are expected to attend Monday's first ritual bath.
"I am excited but now scared because I didn't expect this crowd. This is my first Kumbh and I came here only because my mother is very spiritual," Priyanka Rajput from Delhi told Reuters.
The river banks were covered with some 150,000 tents, and 3,000 kitchens, 145,000 toilets and 99 parking lots have been installed for the pilgrims.
What is the Maha Kumbh Mela
The Maha Kumbh Mela is the largest gathering of humanity, with over 400 million people expected to attend — which is more or less equivalent to the combined population of the US and Canada.
The festival takes place over 45 days, in several locations along major rivers in central and northern India.
"Maha" stands for great or grand, and "Kumbh" literally means pot. The festival is rooted in the Hindu myth of a battle between gods and demons over a pot containing the elixir of immortality.
As the story goes, a few drops of the elixir spilled over in Prayagraj, Haridwar, Ujjain and Nasik, where the festival is held once every 12 years. Prayagraj always tends to draw the biggest crowds.
An "ardh," or half Kumbh, is celebrated at the halfway mark between the two festivals.
During the festival, devotees gather at the confluence of the rivers Ganges, Yamuna and Saraswati to take a holy dip in the water. Devotees believe this will absolve them of sins and grant them "moksha" or salvation.
The key bathing ritual days, "shahi snan," occur on January 14, January 29 and February 3.
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UK Joins Indo-Pacific Trade Bloc as First European Member
The United Kingdom became the 12th member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, as of Sunday. The previous British government signed the accession treaty last year, with most members of the bloc having since ratified the UK's entry.
Officials hope membership could boost Britain's struggling economy by as much as $2.5 billion (roughly €2.4 billion) per year.
The country is trying to strike new trade deals abroad in the aftermath of leaving the European Union following its 2016 referendum on Brexit, with EU member states still accounting for over 40% of UK exports and more than 50% of imports.
What is the CPTPP?
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership had 11 members before the UK: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
The CPTPP was salvaged from the ashes of the planned Trans-Pacific Partnership (TPP) bloc — which was supposed to also include the US — after Washington withdrew soon after the 2016 election of Donald Trump.
It retained most of the provisions of that deal, and lowers trade barriers between member states on a variety of goods. However, the pact offers far less comprehensive free trade than the uninhibited movement of goods and services with EU member states.
The bloc is seen as something of an economic counterweight to China in the Pacific region, though China is also one of several applicants currently seeking membership. Combined, its members currently account for roughly 15% of global GDP and a population of around half a billion.
Deal inked under previous Conservative government
The previous Conservative government signed Britain up in July 2023, with then Business and Trade Secretary Kemi Badenoch — now the leader of the opposition with Labour in power — calling it "the biggest trade deal" since the UK left the European Union.
Britain has secured a number of trade deals, including with Australia, New Zealand and Singapore since leaving the EU's single market at the start of 2021. Critics, however, contend that Brexit's economic impact dwarfs that of these deals.
Labour's Business Secretary Jonathan Reynolds said the country was "uniquely placed to take advantage of exciting new markets, while strengthening existing relationships."
"Today's news is further proof that the UK is a wonderful place to do business, with an open, outward-looking economy driving the growth people can feel in their communities," Reynolds said.
He said his government would in 2025 publish a trade strategy that "will finally put in place a long-term, strategic plan for international trade that helps businesses and consumers and, ultimately, grows the economy."
Badenoch, meanwhile, said it had been her party that delivered the deal bringing the UK somewhat closer to the "fastest-growing economies in the world."
"However, joining a trade bloc is only the start. Labour spent the last parliament mocking our CPTPP negotiations, and they now have a responsibility to ensure that UK companies can make the most of this landmark deal," she said.
Iranian Singer Arrested for Performing without Hijab
A female singer has been arrested by authorities in Iran for not wearing a hijab while performing in a virtual concert on YouTube, a lawyer said. The singer, Parastoo Ahmady, has been detained for defying the Islamic Republic's strict dress code for women.
A case was filed against the 27-year-old singer on Thursday over her concert performance wherein she performed wearing a long black sleeveless dress without a hijab.
While posting the video on YouTube, Ahmady said: "I am Parastoo, a girl who wants to sing for the people I love. This is a right I could not ignore; singing for the land I love passionately."
Her concert has garnered over 1.4 million views online while she has been praised by people online for her courage.
Where is Parastoo Ahmady now?
Her lawyer, Milad Panahipour, said on Saturday that she was arrested in the north of the country, while two musicians from her band were arrested at their music studio in Tehran.
"Unfortunately, we do not know the charges against Ms. Ahmady, who arrested her, or her place of detention, but we will follow up on the matter through legal authorities," Panahipour told the news agency The Associated Press.
Since the 1979 Islamic Revolution in Iran, women's rights have been a contentious issue in the country.
In 2022, Iran saw a wave of mass protests following the custodial death of a Kurdish Iranian woman, Jina Mahsa Amini. The government brutally clamped down on the demonstrations and targeted leading activists. Many Iranian women say they are against the strict dress code, particularly the mandatory headscarf.
7.4 Magnitude Earthquake Hits Vanuatu, Killing 14 and Leaving Thousands Affected
A powerful earthquake of magnitude 7.4 struck Vanuatu’s capital, Port Vila, on Tuesday, causing widespread devastation. At least 14 people have been killed, and over 50 others injured, according to local media and the United Nations. The earthquake also damaged two main water reservoirs and a hospital, leaving critical infrastructure compromised.
Scenes of Destruction
The national broadcaster, VBTC, aired harrowing footage of vehicles crushed under debris from collapsed buildings and boulders blocking major highways. Drone footage revealed landslides near a shipping terminal, underscoring the scale of the disaster. Security camera recordings captured the moment of the quake, showing people fleeing in panic as cars rocked violently.
State of Emergency Declared
Caretaker Prime Minister Charlot Salwai declared a state of emergency on Tuesday evening and announced a seven-day curfew in the worst-affected areas. He described the event as a “sad and devastating time” for Port Vila and expressed condolences to families who had lost loved ones. The government has requested international assistance to cope with the disaster.
Rescue Efforts Underway
Search and rescue teams worked tirelessly into the night to locate survivors trapped under rubble. A police official confirmed ongoing rescue operations in the capital. Port Vila’s hospital reported significant damage, with its operating theatre rendered inoperable. Emergency triage tents have been set up outside to manage the influx of patients.
Widespread Impact
The United Nations Office for the Coordination of Humanitarian Affairs (OCHA) estimates that approximately 116,000 people have been affected by the earthquake. The disruption of communication lines delayed coordination with the National Disaster Management Office until Tuesday evening, when Starlink satellite services were deployed to restore connectivity.
Global Responses and Support
Australian Foreign Minister Penny Wong announced that Australia is preparing to send urban search and rescue teams, along with emergency medical personnel, to assist. New Zealand’s High Commission building in Port Vila, which houses multiple foreign missions, sustained significant damage, including the U.S., British, and French embassies. The U.S. Embassy spokesperson confirmed that all personnel had safely evacuated, though the building suffered "considerable damage."
Fiji’s Prime Minister Sitiveni Rabuka expressed his condolences on social media, calling the disaster “a tragedy that has claimed lives and devastated families in Vanuatu.” Commonwealth Secretary-General Patricia Scotland also voiced concern over the extensive damage and loss of life.
Aftershocks and Tsunami Concerns
The U.S. Geological Survey reported the earthquake at a shallow depth of 10 kilometers (6 miles). Several aftershocks, some strong enough to be felt in Port Vila, followed the initial quake. While a tsunami warning was initially issued, it was later canceled by the U.S. Tsunami Warning System.
Political Context
Vanuatu’s government is currently in caretaker mode ahead of national elections, following the recent dissolution of parliament. This has added to the challenges of responding effectively to the crisis.
A Nation in Mourning
The earthquake has left a lasting scar on Vanuatu’s capital, with thousands reeling from the destruction. As rescue efforts continue and international aid begins to arrive, the resilience of the Vanuatu people will be tested in the days ahead.
Trump Threatens to Impose Additional Tariffs on Indian Goods
US President-elect Donald Trump has threatened to impose additional tariffs on Indian goods even before taking oath. He has also announced similar plans for Brazil.
According to a report by Indian news agency PTI, Trump made these remarks on Tuesday (December 17) while speaking to journalists at his Mar-a-Lago residence.
"If any country imposes excessive tariffs on us, the United States will impose equally high tariffs on their goods," Trump said, referring to India and Brazil. He claimed these countries impose significant tariffs on American products in nearly all sectors, whereas the US has not reciprocated similarly.
Trump emphasized the need for fairness in trade. "If India imposes a 100% tariff on American goods, the U.S. will impose the same rate of tariff on Indian goods. They can impose tariffs on us if they wish, but we will do the same,'' he added.
Earlier, Trump's designated Commerce Secretary Howard Lutnick had made similar statements. He said, "The principle of mutual benefit will be crucial for the new administration. The way you treat us will reflect how we treat you — that's a fair expectation."
On November 5, Donald Trump, the Republican candidate, won the US presidential election, marking a historic return to power. However, he has not yet formally assumed office. Trump is set to be sworn in as the US President on January 20.
Germany: Dresden Opera Visitors Fall Sick
Several opera house visitors in the eastern German city of Dresden had to be treated for nausea and dizziness on Tuesday evening, the cause of which still remained unclear on Wednesday morning.
Three women, aged 62, 66, and 68, said they felt unwell at the end of a concert at the famous Semperoper in the regional Saxony state capital.
Four paramedics who treated the women then also suffered similar symptoms, prompting specialist fire brigade services to be alerted.
What caused the illness?
Air quality tests revealed no measurable quantities of toxic material and oxygen levels were also found to be normal.
Of the seven victims, two were taken to hospital, while local police have opened an investigation into grievous bodily harm.
Opera house visitors and employees were on Wednesday being questioned, but the causes remained unclear.
The concert at the historic Semperoper featured the Saxon State Orchestra, conducted by Philippe Herreweghe, performing works by Joseph Haydn and Wolfgang Amadeus Mozart.
US Responds to Sheikh Hasina’s Alleged Role in Enforced Disappearances
The issue of submitting an interim report on enforced disappearances to Chief Advisor Dr. Muhammad Yunus by the Investigation Commission was raised during a regular press briefing by the US Department of State. The United States welcomed the interim government's initiative to investigate these incidents and encouraged maintaining fairness and transparency in the judicial process.
Speaking at the briefing on Wednesday, December 18, Vedant Patel, Deputy Spokesperson of the US State Department, addressed concerns about enforced disappearances in Bangladesh.
During the session, a journalist questioned the possibility of US sanctions against former Prime Minister Sheikh Hasina over her alleged involvement in enforced disappearances. The journalist referred to a report by The New York Times, which cited findings from the Investigation Commission implicating Sheikh Hasina in such incidents. The journalist also noted that the US had previously imposed sanctions on individuals involved in disappearances in Bangladesh.
In response, Patel expressed serious concern over reports that hundreds of Bangladeshis have been forcibly disappeared over the past two decades. He described enforced disappearances as grave human rights violations causing trauma and mental anguish to victims and their families. He stated, “We welcome the interim government’s efforts to investigate these crimes and encourage a fair and transparent process to ensure justice for the victims and their families.”
Patel reiterated the US’s support for justice through due process and fairness.
Earlier, on Saturday, December 14, the Investigation Commission submitted an interim report to Chief Advisor Dr. Muhammad Yunus. The report presented evidence linking former Prime Minister Sheikh Hasina to orders behind enforced disappearances over the past 15 years. It also recommended dissolving the Rapid Action Battalion (RAB) and initiating judicial proceedings against those involved.
The briefing also touched on the topic of Bangladesh's next general election. A journalist inquired about the US position regarding the announcement of possible election dates in late 2025 or early 2026.
In response, Vedant Patel welcomed the steps taken by the interim government to prepare for elections, emphasizing that these measures would enable the Bangladeshi people to choose their leadership. Patel added, “Determining the timing of elections is an area we will continue to monitor. Throughout the process, we encourage adherence to the rule of law and the implementation of democratic principles. As always, our position remains in favor of free, fair, and peaceful elections conducted transparently.”
Can China Shield the Biggest Uninsured Economy From Floods?
The rivers and canals that meander through Hemudu in southeastern China are a vital source of life and community — they provide income for fishermen, an after-school hangout spot for kids, and define the town’s landscape. But when it rains, those waterways become a liability.
"This area floods every year,” says Zheng, a long-time resident who lives less than a mile away from a river. Over the past decade and a half, Zheng has seen floodwater repeatedly threaten the ground-floor grocery store that he runs and his home above. But with his income "barely enough to make ends meet” and a grandson to look after, the 60-year-old says relocation isn’t an option.
He’s tried but failed to insure his property. "Insurance companies turned us down because they said they'd have no chance to make money,” says Zheng, who asked not to be identified by his full name for fear of reprisal. "No one would take such a risk.”
Zheng is one of hundreds of millions of Chinese citizens whose homes and livelihoods have grown more precarious on a rapidly warming planet. Of the 20 most climate-vulnerable regions, 16 are on Chinese soil. Yet the world’s second-largest economy is among the least insured. Only about 10% of Chinese families have a home insurance policy, according to industry estimates. That figure is nearly 90% in the U.S.
China’s government knows it has to do something about that gap, which Swiss Re AG estimates amounted to $273 billion in uninsured losses over the last decade. Officials first started seriously discussing the need to build an insurance system after the devastating 2008 Sichuan earthquake killed almost 90,000 people and cost an estimated 845 billion yuan ($116 billion). But uptake has been slow, and now climate change is making insurance increasingly unattainable all over the world.
Part of the problem is cultural. Many Chinese people have traditionally relied on the government and family members in times of trouble, rather than market-based financial products. "Insurance as a service has not been widely accepted in China,” says Tian Ling, a professor at Wuhan University’s Economics and Management School. "If it’s up to Chinese individuals, very few people would buy catastrophe insurance. That leaves the government no choice but to purchase it for their citizens.”
As China’s government faces pressure from the public to show it’s taking steps to protect people from more extreme weather, the nation’s top-down economic management style is colliding with an insurance industry upended by global warming. Officials have started buying policies that cover entire cities and provinces. But local authorities are short on cash, meaning the coverage they can afford is far from what’s needed, even as rising climate risks cause premiums to surge. The decade-long initiative, instead, risks downplaying how exposed people really are and could even backfire by making it harder to unlock national funds in times of crisis, since these regions are ostensibly covered by the private market.
In 2014, the government of Ningbo, which oversees Hemudu, stepped in to buy citywide catastrophe insurance to cover residents like Zheng. A typhoon had wreaked havoc on the city the year before, prompting thousands of people to protest what they saw as insufficient disaster relief. It was one of the first experiments in what would eventually become a nationwide trial covering tens of millions of people in 74 cities and 15 provinces.
Unlike Zheng’s failed attempt to buy his own coverage, insurers found the Ningbo government was a client they couldn’t refuse. Participating providers have lowered their prices so the government can afford it because the program is too important to fail, according to people familiar with the arrangement who requested anonymity to discuss private details. Ningbo officials secured a discount of several million yuan on the annual premium for the three-year policy signed in 2021, one of the people said, even though the initial, higher price was based on the city’s growing climate risks calculated using scientific models.
Catastrophe insurance is not a lucrative business in Ningbo, according to an executive at PICC Property and Casualty, a top Chinese insurer that has been part of the program since 2014. "We are not after financial returns,” the executive said, asking not to be identified because they’re not authorized to speak to the media. When it comes to serving the government, "the political consideration outweighs anything else.”
The Ningbo government and PICC did not respond to questions about the catastrophe insurance program.
There is a potential risk for foreign investors backing the Chinese insurers that have been drawn into the programs. PICC has insured catastrophe risks for other provinces including Hebei, Sichuan and Zhejiang. China Life Insurance, Asia’s biggest insurer, has sold policies to Henan’s government and Ping An Insurance Group of China Ltd. is among those supporting the technology hub Shenzhen. All three companies are listed on the Hong Kong Stock Exchange. Citigroup and BlackRock, for example, hold 11% and 6% of PICC’s shares, respectively, according to data compiled by Bloomberg.
Chinese insurers don’t publish detailed profit breakdowns to establish how much these government deals have affected their bottom lines. But their experience in Ningbo in 2015 gives some indication. A consortium led by PICC lost about 56 million yuan due to a string of calamities that year, according to a 2022 analysis done by the insurer, Ningbo University and the local government. The disasters put the program "at risk of bankruptcy,” the authors noted, and "sounded an alarm about its future liabilities.” Yet a growing number of local authorities have struck similar deals with insurers, covering longer periods of time.
Wang He, chair of the China Association of Actuaries, has spent years studying the country’s catastrophe insurance problem. The ongoing local trials aren’t sustainable without broader publicly funded mechanisms to support communities after disaster, he says. "Catastrophe risk management falls within the realm of public management,” says Wang. A lack of understanding of that "public nature” in China has led to "a simplistic approach of delegating the job to the insurance industry, which is ill-equipped to shoulder the entire responsibility."
Without a wider protection system, flood victims like Zheng don’t have much recourse. In 2015, after Ningbo started its catastrophe insurance program, the shopkeeper received the first payout of his life. It was 1,000 yuan ($140), even though the water destroyed thousands of yuan worth of bottled water, snacks and everyday essentials such as toothbrushes that he could no longer sell.
Located about 150 miles south of Shanghai, Ningbo is a land of historic relics and modern skyscrapers. The 7,000-year-old city owes much of its prosperity to the East China Sea, which once helped Ningbo carve out a spot on the ancient Silk Road and continues to make it a vital trading hub. But the bustling coastal region is also a magnet for natural disasters. The city, home to nearly 10 million people, has been battered by more than 40 storms over the last two decades.
While that first payout in 2015 left the insurers who sold the policy in deficit, the government was pleased with the 78 million yuan its residents received. It was almost twice what the government had spent on premiums. The apparent success convinced officials to turn the one-year pilot into a three-year deal. It also turned Ningbo into a shining example of how to deploy catastrophe insurance. Bureaucrats from all over China flocked to the city to learn how to replicate the program at home.
But local governments across the country face the same dilemma as Ningbo. They’re trillions of yuan in debt and grappling with an economic slowdown that's seen China's government add a sweeping package of stimulus measures. There isn’t enough cash to dole out when disaster strikes; even investing in insurance policies can be a stretch. In 2021, when record rain battered Henan province in central China, killing nearly 400 people, relief spending ballooned to 100 million yuan in a matter of days. China said last year that it would issue 1 trillion yuan in special Treasury bonds to raise funds for future calamities.
The central government typically allocates relief funds after an area is hit by destructive weather, but how much trickles down to individual households depends on how local authorities decide the money should be spent. China’s top leaders signalled this month that the nation will increase public borrowing and spending in 2025, but officials have so far been reluctant to directly hand out cash or significantly widen the social safety net. President Xi Jinping has warned against falling into a trap of "welfare” or "feeding lazy people.”
All that makes catastrophe insurance an appealing solution. Still, the policies are pricey because they guard against extreme risks, and premiums are quickly rising as reinsurers brace for higher climate damages. The World Bank estimates that China will lose as much as 2.3% of its economic output to weather perils made worse by global warming by the end of this decade.
The Ningbo Model — as the insurance program was dubbed by the Communist Party mouthpiece People’s Daily — has been held up as a win-win answer because it enlists the private sector to lessen the financial burden on the state and payments are quicker without having to deal with government red tape. But it also has some less appealing characteristics. Unlike traditional insurance, where payouts are commensurate with actual losses, Ningbo has a "parametric insurance” policy that only delivers compensation when certain thresholds are hit. A home inundated with, say, 7 inches of water might not meet the requirement for a payout if the trigger requires floodwaters to reach 7.8 inches.
There’s also a cap on each payment. If their house collapses, a family only stands to receive a maximum payout of 10,000 yuan in a given year. An average house in Ningbo is worth 23,000 yuan per square meter. Since the program started, eligible households have received under 660 yuan each, on average, less than 1% of the annual disposable income of the city’s residents.
The insurers behind Ningbo’s program have gradually raised the upper limit for payouts, but how far they can go comes back to how much the government can afford in premiums. Ningbo is home to China’s second-busiest cargo port and a petrochemical industry worth $72 billion, helping it to weather China’s economic woes better than many of its neighbours. Even so, local officials rejected an informal proposal to turn its current three-year policy into a five-year arrangement, due in large part to concerns over the government’s ability to commit to the program long-term, according to one of the people familiar with the deal.
In recent years, the government has also added clauses to the policy that likely wouldn’t pass muster in the West. Starting in 2021, participating insurers are required to channel a chunk of their underwriting profits to Ningbo’s disaster relief fund if the city avoids major damages during their time of service. That, together with the push to raise compensation levels, has forced the insurers to operate on razor-thin margins, even in good years.
The practice is "not widely used in commercial markets,” says Christopher Au, climate practice lead for Asia Pacific at insurance broker WTW. But because insurers can tap the relief fund under some circumstances if payouts exceed what they’ve collected in premiums, Au says the arrangement can also potentially help spread out their risk and reduce the volatility of profits and losses from year to year.
To keep climate-induced losses at bay, Ningbo has improved its early-warning system for typhoons and moved some residents out of floodplains.
But the insurance program remains a cosmetic addition to the city’s arsenal of protection measures. All told it offers a maximum coverage of 500 million yuan per year for natural catastrophes. A 2022 study published in Nature estimates that climate change will increase the frequency of super typhoons in Zhejiang province, where Ningbo sits, causing damages as high as 36 billion yuan, on average, every eight years by the end of the century.
The intention was always for government-funded insurance to eventually translate into a more robust private market. In theory, as beneficiaries of the public program grew more familiar with the idea of insurance, they would start buying policies of their own. Yet less than 40% of Ningbo residents surveyed for the 2022 analysis expressed interest in purchasing their own catastrophe insurance.
Local governments will likely remain the driving force behind any catastrophe insurance in China for the coming years, says Wang Xujin, executive director of the Insurance Society of China, an industry group. One way to keep premiums manageable for local governments is to scale up the program across the country, spreading risk over vast areas with different climate risks.
That’s easier said than done. For one, some poorer local governments simply don’t have the resources to spare. It will also be extremely difficult to convince officials in lower-risk areas to split the bill with those that are more highly exposed, he says.
There have been attempts within the central government to set up a national catastrophe insurance program, says Wuhan University’s Tian. But none of the talks have borne fruit. "The discussions always circle back to one issue,” she says. "Who pays?”
Wang He, from the China Association of Actuaries, says he’s concluded there’s only one solution. China needs to build a "new national system” that establishes a disaster relief fund for the whole country financed by the central government and other financial instruments such as catastrophe bonds.
Until then, Chinese officials are eager to point to the growing insurance program as evidence that they’re taking action. Ningbo’s government has touted it as a "shock absorber” for the economy that will help boost social stability. In Shiqiao, a canal-side suburb of Ningbo, a tailor surnamed Lin is mollified that the state is at least trying to do something about the constant flooding.
Like Zheng, she also received an insurance payout of 1,000 yuan after waist-deep water inundated her home in 2022 and soaked a stockpile of new solar-powered water heaters she had planned to sell. "The 1,000 yuan is far from enough to cover my losses,” she says. "But it’s better than nothing.”
Source: Bloomberg
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