Swiss Re describes 2011 as the “year with the highest catastrophe-related economic losses in history, at $350 billion.” It could have been the most costly year ever for the insurance industry, if Japan had been more fully insured.
The figures were compiled by Swiss Re’s sigma team, which estimated that “total insured losses for the global insurance industry from natural catastrophes and man-made disasters reached $108 billion in 2011” – more than twice the $48 billion in 2010. “Claims from natural catastrophes alone reached $103 billion in 2011, compared to only $43 billion last year,” said the report.
The total economic losses, both insured and uninsured, due to disasters reached an estimated $350 billion, compared to $226 billion in 2010. The earthquake in Japan accounts for most of this year’s economic losses. More than 30,000 people lost their lives due to catastrophes in the first eleven months of the year, most of them in Japan.
Swiss Re’s Chief Economist Kurt Karl stated: “2011 is going down as another year of very tragic and costly earthquakes. Unfortunately earthquake insurance coverage is still quite low, even in some industrialized countries with high seismic risk, like Japan. So on top of people losing their loved ones, societies are faced with enormous financial losses that have to be borne by either corporations, relief organizations or governments and, ultimately, taxpayers.”
The $108 billion estimate for insured catastrophe losses, ranks as nearly the most expensive year for the insurance industry according to sigma records, second only to 2005 ($123 billion). Swiss Re explained that “moderate hurricane losses have kept costs lower than in 2005, the year when hurricanes Katrina, Wilma and Rita alone caused claims of over $ 100 billion.
“If Japan had been as well insured as other countries with high seismic risk, such as New Zealand, the overall industry tally would have been much higher.”
However, the study also notes that the year isn’t over yet, and that “additional claims from the ongoing massive floods in Thailand or from winter storms which may yet hit Europe have the potential to bring figures for the full year even closer to the record claims of $123 billion experienced in 2005.
“In addition to the earthquakes in Japan and New Zealand, severe flooding in Thailand and Australia triggered above $10 billion in insurance claims. Two massive tornado events in the United States caused nearly $14 billion in claims and the loss of more than 400 lives. Hurricane Irene cost the industry nearly $5 billion in property damage.
Source: Swiss Re
Topics Catastrophe Profit Loss Claims Market Japan Earthquake
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