:00:00. > :00:16.Now it's time for World Business Report.
:00:17. > :00:20.Harvey could overtake Katrina as America's costliest hurricane,
:00:21. > :00:24.but will Irma prove even more expensive?
:00:25. > :00:28.We look at the spiralling cost of extreme weather and who pays?
:00:29. > :00:32.The boss of Virgin Atlantic tells us how they're helping customers
:00:33. > :00:39.in the Caribbean and aiding the recovery effort.
:00:40. > :00:47.China's trade surplus with the US jumps in August.
:00:48. > :00:56.As you've been hearing, it's one of the strongest storms
:00:57. > :00:59.ever recorded and aside from the human cost of the disaster,
:01:00. > :01:04.experts warn it could also be one of the most expensive.
:01:05. > :01:07.Much depends on what happens when it reaches densely populated Miami
:01:08. > :01:12.but estimates range from $70 to $190 billion.
:01:13. > :01:15.The financial cost of this year's hurricane season is already
:01:16. > :01:27.There's no official figure yet for Hurricane Harvey,
:01:28. > :01:29.which caused severe flooding and displaced more than a million
:01:30. > :01:42.But some including the Governor of Texas are estimating costs
:01:43. > :01:47.it would put Harvey ahead of Hurricane Katrina in 2005,
:01:48. > :01:49.officially the costliest hurricane in US history.
:01:50. > :01:51.Katrina did damage of nearly $160 billion.
:01:52. > :01:53.Until this year, nothing had come close to Katrina,
:01:54. > :01:56.although Hurricane Sandy in 2012 caused more than $68 billion
:01:57. > :02:07.But it's clear the economic damage from extreme
:02:08. > :02:11.Since 1980, the US has experienced 212 major weather disasters
:02:12. > :02:12.with costs totalling $$1.2 trillion.
:02:13. > :02:18.So is climate change behind this spiralling bill?
:02:19. > :02:20."One of the things we know about climate change
:02:21. > :02:21.is that a warmer atmosphere
:02:22. > :02:29.So that means when a hurricane does hit, more rain can come out of that
:02:30. > :02:31.hurricane and cause a lot more flooding.
:02:32. > :02:45.Another thing is that warmer oceans feed the hurricane,
:02:46. > :02:48.so a warmer ocean means stronger hurricanes.
:02:49. > :02:51.In this particular basin it's particularly hard to see a past
:02:52. > :02:54.event where so many hurricanes have occurred in such quick succession.
:02:55. > :02:56.It's not just the number of hurricanes, it's the magnitude.
:02:57. > :03:00.Bronek Masojada is Chief Executive of the Hiscox Insurance Group based
:03:01. > :03:11.Thank you for coming in. Those figures we were talking about, those
:03:12. > :03:15.are the total costs, when we talked about the costs the insurance
:03:16. > :03:19.companies will pay out, that will be a smaller figure, but even after
:03:20. > :03:25.that this is shaping up to be one of the most expensive years so far for
:03:26. > :03:30.the insurance industries? So far we have spent between $10 billion and
:03:31. > :03:37.$15 billion in Houston, it is much less than the actual cost because
:03:38. > :03:42.few people in America purchase flood insurance. The real cost is much
:03:43. > :03:47.higher. In terms of Irma, we expected to be a bigger cost. Most
:03:48. > :03:51.people buy insurance against wind damage and so the economic cost
:03:52. > :03:55.because of the insurance costs could be anywhere between $50 billion and
:03:56. > :03:59.100 $50 billion, so a bigger proportion of the total cost. Lots
:04:00. > :04:03.of people don't have insurance against flooding, white, our
:04:04. > :04:11.premiums too expensive? It's the way the industry has evolved. -- why.
:04:12. > :04:17.It's very seldom... Wins are more frequent than floods. It's available
:04:18. > :04:26.either from private insurers or National Insurance -- wins. Many
:04:27. > :04:31.people think it is too expensive. Many insurance companies did a dry
:04:32. > :04:36.run of many scenarios, a cyber attack, a hurricane hitting Miami,
:04:37. > :04:42.all within a two-week period to learn lessons about how to cope when
:04:43. > :04:45.seismic events like these come in quick succession. What lessons did
:04:46. > :04:51.you learn from that drive run and has it helped for you to prepare for
:04:52. > :04:55.the hurricane season -- dry run. The last big event was Katrina in 2005
:04:56. > :05:00.so we are out of practice. What the dry run made us realise is we need
:05:01. > :05:05.to update our contingency plans and actually last week after the floods
:05:06. > :05:10.in Houston we invoked that plan and it's really working. It's making us
:05:11. > :05:15.pay claims faster, it means we're getting muggy to the people who need
:05:16. > :05:20.it when they need it most quickly -- money. It's been incredibly helpful.
:05:21. > :05:24.Do you think the record claims we will see from this season will have
:05:25. > :05:27.an impact on the future of the insurance industry, our premiums
:05:28. > :05:33.going to rise or will people be unable to get insurance? -- are the
:05:34. > :05:37.premiums. I doubt people would be able to get insurance, this is why
:05:38. > :05:43.we are here, we expect to pay all these claims. Overtime will premiums
:05:44. > :05:48.go up? I expect we will see small to medium-sized increases -- over time.
:05:49. > :05:52.The exact impact will depend on exactly where Irma goes and into
:05:53. > :05:56.days, it will be the weekend before it hits the mainland Florida coast
:05:57. > :06:00.and the actual hurricane path makes a big difference. 100 miles to the
:06:01. > :06:04.east to west will make a big difference to the ultimate economic
:06:05. > :06:05.cost but this is a big one. Thanks for your time.
:06:06. > :06:09.We are also looking at the response of the airlines to Hurricane Irma.
:06:10. > :06:12.They're putting on extra flights to get tourists home from Florida
:06:13. > :06:15.and the Caribbean, but some are also starting to play
:06:16. > :06:18.The Chief Executive of Virgin Atlantic, Craig Kreeger,
:06:19. > :06:23.told the BBC's Theo Leggett how they are responding.
:06:24. > :06:32.We've already started with today's like taking water and blankets on
:06:33. > :06:35.with us. On tomorrow's flight we will take building materials and
:06:36. > :06:39.roofing materials -- today's flight. We anticipate this being a long
:06:40. > :06:43.rebuilding process and we are committed to the region. We've been
:06:44. > :06:48.encouraging customers in Florida to come back early and we might we will
:06:49. > :06:51.put an extra air plane on if we need to to help them get back on Friday
:06:52. > :06:55.instead of waiting until the weekend. If we need extra flights on
:06:56. > :06:59.Monday to take things there or bring people back then we will do so.
:07:00. > :07:04.These are situations that as an airline we have an important role to
:07:05. > :07:08.play, and no role we both recognise and take very seriously. How
:07:09. > :07:13.prepared are you for events like this? -- and a roll. With whether
:07:14. > :07:17.particularly we stand up a team that starts looking at the forecast and
:07:18. > :07:20.assessing whether we should change schedules and make adjustments for
:07:21. > :07:24.customers and offer them the capability to change bookings and we
:07:25. > :07:29.did that sometime ago this one and then obviously when it hits, we
:07:30. > :07:33.figure out what we can do to help. There have been reports from the
:07:34. > :07:36.United States about some airlines engaging in price gouging, lifting
:07:37. > :07:41.their prizes for people trying to get out of areas likely to be hit by
:07:42. > :07:47.the hurricane. How do you react to that? I'm not familiar with those
:07:48. > :07:51.reports -- prices. If they are not uncomfortable going to these
:07:52. > :07:56.destinations and they want to delay a month or so, we will do that
:07:57. > :07:59.without charge. These are difficult events and obviously it would be
:08:00. > :08:02.great for Virgin Atlantic but that's not the important part, the
:08:03. > :08:06.important part is for customers to be safe and for us to get our people
:08:07. > :08:08.and our customers where they need to get to. The chief executive of
:08:09. > :08:10.Virgin Atlantic. Let's go to Asia now
:08:11. > :08:13.and the controversy over China's trade imbalance with the US
:08:14. > :08:15.is likely to be rekindled. China runs a big trade
:08:16. > :08:18.surplus with the US, in other words it's selling more
:08:19. > :08:21.to US than it buys from it. The latest figures show that
:08:22. > :08:26.surplus widened in August. Sharanjit Leyl is following this
:08:27. > :08:34.for us in Singapore. Give us the figures. That's right,
:08:35. > :08:39.Rachel. The world's factory seems to be at it again and that massive
:08:40. > :08:43.trade surplus with the US came in at over $26 billion for the month of
:08:44. > :08:47.August. That's a rise from the previous month. Essentially taking
:08:48. > :08:52.the January to August numbers to about $168 billion, a whopping
:08:53. > :08:56.figure that's unlikely to make President Donald Trump too happy and
:08:57. > :09:01.it's going to raise trade tensions again I suppose. We know China's
:09:02. > :09:06.trade numbers for August also posted strong growth so we saw experts
:09:07. > :09:11.rising about 5.5% in US dollar terms, imports were up 13%. All of
:09:12. > :09:16.this seems to show China's trade performance seems to be something of
:09:17. > :09:20.a rebound this year after several lean years, that's really due to
:09:21. > :09:25.much stronger demand you're seeing at home over there in China as well
:09:26. > :09:28.as a broad, exports appear to be contributing to China's economic
:09:29. > :09:32.growth, it's re-establishing its role as the factory to the world and
:09:33. > :09:35.it's really gone back to a lot of its old ways with its very strong
:09:36. > :09:43.appetite for industrial commodities, the likes of iron ore and coal,
:09:44. > :09:44.which is really boosting resource prices worldwide as well. Sharanjit
:09:45. > :09:50.Leyl, thank you for that. The American credit rating giant
:09:51. > :09:54.Equifax says its computer systems have been hit by hackers potentially
:09:55. > :09:56.affecting 143 million The company says the hacking took
:09:57. > :10:00.place between May and July The hackers stole data
:10:01. > :10:03.including names, addresses Some British and Canadian accounts
:10:04. > :10:12.could also have been affected. Let's see how the markets have been
:10:13. > :10:16.getting on and Asian markets are still currently trading, they are a
:10:17. > :10:20.bit mixed, there they are, the Hang Seng up, the Nikkei down because the
:10:21. > :10:24.yen is still strong and the Nikkei is stuffed full of exporters were
:10:25. > :10:30.the strong yen makes their items more expensive for foreign
:10:31. > :10:34.companies. Let's look at Wall Street, it held steady yesterday,
:10:35. > :10:36.not a lot of movement. Waiting to see what happens with the
:10:37. > :10:37.hurricanes. That's it from me. Don't forget you can get in touch
:10:38. > :10:42.with me and some of the team