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Insurers may hike premiums for flood-prone properties in Singapore after a deluge caused millions of dollars in damage and led to luxury stores being barricaded with sandbags, a report said Friday.
“Three floods within a one-month period is unprecedented in Singapore,” General Insurance Association president Derek Teo told the Straits Times as businesses and homeowners in the city-state braced for more rains.
The daily estimated that claims for damage to property and vehicles since mid-June could exceed 10 million Singapore dollars (7.28 million US).
Among the flood-prone areas under review is the fashionable Orchard Road shopping belt, home to some of Singapore’s richest people.
Some ground-floor establishments in the area, including a branch of the Hermes luxury chain, are now protected by sandbags.
Teo, who could not be reached for comment on Friday, was quoted as saying that the damage resulting from heavy rains and overwhelmed drains “is of concern to insurers, and they are monitoring the situation closely”.
Flood insurance used to be thrown in for free because of the competitive market and historically low exposure to such incidents, the report said.
Singapore’s founding father Lee Kuan Yew said on Wednesday that floods on the tropical island were unavoidable due to constant rain and scarce land.
The 86-year-old former prime minister, now an adviser to his son Lee Hsien Loong’s government, also admitted that government measures to reduce the impact of floods were insufficient.
The Straits Times said one of Singapore’s largest insurers, NTUC Income, had received more than 100 flood-related claims for damage to vehicles and property.
Kua Ka Hin, Singapore chief executive of international insurance firm Munich Re, expressed concern that heavily-urbanised Singapore might experience more frequent floods in future.
“Can current drainage infrastructure cope with the new intensity?” he asked.
“Also with urbanisation, there is increased surface run-off. Looking at Orchard Road for example, there are large tranches of land which are now covered in concrete, which previously would have allowed water to permeate naturally,” the report quoted him as saying.