The top 10 Chinese companies, with combined revenues of almost US$1.5 trillion, could suffer around US$122 billion of connected loss exposures due to the coronavirus outbreak, according to a report by risk modelling firm Russell Group.
The scenario model, which is based on a sample of historic first-quarter economic data for Chinese economy and companies, outlines the disruptive impact of the coronavirus on these companies and the economy.
China National Petroleum Corporation, which reported revenues of US$359 billion for the year, is the company with the largest exposure at US$29 billion. According to Russell Group, other industries are affected too – Huawei’s combined exposure across various business sectors amounts to US$16 billion. Meanwhile, Apple China’s loss exposure amounts to US$3 billion.
Global insurers and risk managers fear that the coronavirus is set to cause massive business interruption and unbalance today’s delicate and complex global supply chains, the report said.
“While the China import/export numbers may be excessive, they only represent a partial analysis of the wide global picture, which is a major concern for businesses, risk managers, analysts and investors in managing the coronavirus disruption,” said Suki Basi, managing director of Russell Group. “However, as we have shown here, deeper data-led insights of business and trade flows can help businesses and their re/insurers ensure that their operations become resilient to failure.”
