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Jun 2019

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Iran: Floods cause estimated economic losses of up to $3.6bn

Source: Middle East Insurance Review | May 2019

Weeks of torrential rainfall have led to total economic losses unofficially estimated by local government officials at up to IRR150tn ($3.6bn), according to Aon.
 
In its Global Catastrophe Recap – March 2019 report, Aon said flooding swept through the Iranian province of Sistan and Baluchistan on 9-10 March. Total economic damage to infrastructure and agriculture alone was listed at up to IRR3.1tn. Damage to homes was listed at IRR110bn.
 
At least 26 of Iran’s 31 provinces have been affected by the floods that lasted into early April, killing at least 70 people. Another 600 people were injured. Flooding damaged or destroyed 85,000 homes, infrastructure, and vast areas of agricultural land in more than 1,900 cities and villages.
 
The floods have caused hundreds of millions of dollars of damage to Iranian agriculture, according to Reuters. Early estimates put agriculture sector losses at IRR47trn, the head of the Agriculture Ministry’s crisis management, Mohammad Mousavi, was quoted as saying by state news agency IRNA based on the unofficial exchange rate of IRR135,000 to a dollar.
 
The government has assured citizens, and especially flood-affected farmers, that all losses will be compensated. But the speaker of parliament said the new government budget would not be sufficient to cover the damages and the government should seek other resources. Iran’s operating budget is already stretched under the US sanctions on energy and banking sectors that have halved its oil exports and restricted access to revenues abroad.
 
Insurers have reportedly conducted initial assessments of flood damages in the provinces of Golestan, Fars, Ilam, Khouzestan, Mazandaran and Lorestan. No total estimates have been given of the insured losses.
 
The severity of the floods was greatly increased by converting flood routes and dry river beds for urban development without providing proper drainage infrastructure, said ReliefWeb, a specialised digital service on global crises and disasters of the UN Office for the Coordination of Humanitarian Affairs. According to an Iranian official, due to record rainfalls, more than 140 rivers have burst their banks. M 
 
IRR1,000 = $0.02
 
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