08/09/2017 World Business Report

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Now it's time for World Business Report.


Harvey could overtake Katrina as America's costliest hurricane,


but will Irma prove even more expensive?


We look at the spiralling cost of extreme weather and who pays?


The boss of Virgin Atlantic tells us how they're helping customers


in the Caribbean and aiding the recovery effort.


China's trade surplus with the US jumps in August.


As you've been hearing, it's one of the strongest storms


ever recorded and aside from the human cost of the disaster,


experts warn it could also be one of the most expensive.


Much depends on what happens when it reaches densely populated Miami


but estimates range from $70 to $190 billion.


The financial cost of this year's hurricane season is already


There's no official figure yet for Hurricane Harvey,


which caused severe flooding and displaced more than a million


But some including the Governor of Texas are estimating costs


it would put Harvey ahead of Hurricane Katrina in 2005,


officially the costliest hurricane in US history.


Katrina did damage of nearly $160 billion.


Until this year, nothing had come close to Katrina,


although Hurricane Sandy in 2012 caused more than $68 billion


But it's clear the economic damage from extreme


Since 1980, the US has experienced 212 major weather disasters


with costs totalling $$1.2 trillion.


So is climate change behind this spiralling bill?


"One of the things we know about climate change


is that a warmer atmosphere


So that means when a hurricane does hit, more rain can come out of that


hurricane and cause a lot more flooding.


Another thing is that warmer oceans feed the hurricane,


so a warmer ocean means stronger hurricanes.


In this particular basin it's particularly hard to see a past


event where so many hurricanes have occurred in such quick succession.


It's not just the number of hurricanes, it's the magnitude.


Bronek Masojada is Chief Executive of the Hiscox Insurance Group based


Thank you for coming in. Those figures we were talking about, those


are the total costs, when we talked about the costs the insurance


companies will pay out, that will be a smaller figure, but even after


that this is shaping up to be one of the most expensive years so far for


the insurance industries? So far we have spent between $10 billion and


$15 billion in Houston, it is much less than the actual cost because


few people in America purchase flood insurance. The real cost is much


higher. In terms of Irma, we expected to be a bigger cost. Most


people buy insurance against wind damage and so the economic cost


because of the insurance costs could be anywhere between $50 billion and


100 $50 billion, so a bigger proportion of the total cost. Lots


of people don't have insurance against flooding, white, our


premiums too expensive? It's the way the industry has evolved. -- why.


It's very seldom... Wins are more frequent than floods. It's available


either from private insurers or National Insurance -- wins. Many


people think it is too expensive. Many insurance companies did a dry


run of many scenarios, a cyber attack, a hurricane hitting Miami,


all within a two-week period to learn lessons about how to cope when


seismic events like these come in quick succession. What lessons did


you learn from that drive run and has it helped for you to prepare for


the hurricane season -- dry run. The last big event was Katrina in 2005


so we are out of practice. What the dry run made us realise is we need


to update our contingency plans and actually last week after the floods


in Houston we invoked that plan and it's really working. It's making us


pay claims faster, it means we're getting muggy to the people who need


it when they need it most quickly -- money. It's been incredibly helpful.


Do you think the record claims we will see from this season will have


an impact on the future of the insurance industry, our premiums


going to rise or will people be unable to get insurance? -- are the


premiums. I doubt people would be able to get insurance, this is why


we are here, we expect to pay all these claims. Overtime will premiums


go up? I expect we will see small to medium-sized increases -- over time.


The exact impact will depend on exactly where Irma goes and into


days, it will be the weekend before it hits the mainland Florida coast


and the actual hurricane path makes a big difference. 100 miles to the


east to west will make a big difference to the ultimate economic


cost but this is a big one. Thanks for your time.


We are also looking at the response of the airlines to Hurricane Irma.


They're putting on extra flights to get tourists home from Florida


and the Caribbean, but some are also starting to play


The Chief Executive of Virgin Atlantic, Craig Kreeger,


told the BBC's Theo Leggett how they are responding.


We've already started with today's like taking water and blankets on


with us. On tomorrow's flight we will take building materials and


roofing materials -- today's flight. We anticipate this being a long


rebuilding process and we are committed to the region. We've been


encouraging customers in Florida to come back early and we might we will


put an extra air plane on if we need to to help them get back on Friday


instead of waiting until the weekend. If we need extra flights on


Monday to take things there or bring people back then we will do so.


These are situations that as an airline we have an important role to


play, and no role we both recognise and take very seriously. How


prepared are you for events like this? -- and a roll. With whether


particularly we stand up a team that starts looking at the forecast and


assessing whether we should change schedules and make adjustments for


customers and offer them the capability to change bookings and we


did that sometime ago this one and then obviously when it hits, we


figure out what we can do to help. There have been reports from the


United States about some airlines engaging in price gouging, lifting


their prizes for people trying to get out of areas likely to be hit by


the hurricane. How do you react to that? I'm not familiar with those


reports -- prices. If they are not uncomfortable going to these


destinations and they want to delay a month or so, we will do that


without charge. These are difficult events and obviously it would be


great for Virgin Atlantic but that's not the important part, the


important part is for customers to be safe and for us to get our people


and our customers where they need to get to. The chief executive of


Virgin Atlantic. Let's go to Asia now


and the controversy over China's trade imbalance with the US


is likely to be rekindled. China runs a big trade


surplus with the US, in other words it's selling more


to US than it buys from it. The latest figures show that


surplus widened in August. Sharanjit Leyl is following this


for us in Singapore. Give us the figures. That's right,


Rachel. The world's factory seems to be at it again and that massive


trade surplus with the US came in at over $26 billion for the month of


August. That's a rise from the previous month. Essentially taking


the January to August numbers to about $168 billion, a whopping


figure that's unlikely to make President Donald Trump too happy and


it's going to raise trade tensions again I suppose. We know China's


trade numbers for August also posted strong growth so we saw experts


rising about 5.5% in US dollar terms, imports were up 13%. All of


this seems to show China's trade performance seems to be something of


a rebound this year after several lean years, that's really due to


much stronger demand you're seeing at home over there in China as well


as a broad, exports appear to be contributing to China's economic


growth, it's re-establishing its role as the factory to the world and


it's really gone back to a lot of its old ways with its very strong


appetite for industrial commodities, the likes of iron ore and coal,


which is really boosting resource prices worldwide as well. Sharanjit


Leyl, thank you for that. The American credit rating giant


Equifax says its computer systems have been hit by hackers potentially


affecting 143 million The company says the hacking took


place between May and July The hackers stole data


including names, addresses Some British and Canadian accounts


could also have been affected. Let's see how the markets have been


getting on and Asian markets are still currently trading, they are a


bit mixed, there they are, the Hang Seng up, the Nikkei down because the


yen is still strong and the Nikkei is stuffed full of exporters were


the strong yen makes their items more expensive for foreign


companies. Let's look at Wall Street, it held steady yesterday,


not a lot of movement. Waiting to see what happens with the


hurricanes. That's it from me. Don't forget you can get in touch


with me and some of the team