Swiss Re sigma 2004 Catastrophe Estimates: 21,000 Dead; $105 Billion Economic Loss; $42 Billion Insured

According to preliminary estimates from Swiss Re’s forthcoming sigma report, more than 21,000 people around the world lost their lives as a result of natural and man-made catastrophes in 2004. Economic losses were around $105 billion worldwide, while property insurance claims were approximately $42 billion.

The preliminary figures, released last week, indicated that around 300 natural and man-made catastrophes had been registered in 2004, making this year – after 1992, 1999 and 2001 – “another record year in terms of insurance claims. About 95 percent of claims were attributable to natural catastrophes.”

“The largest claims occurred in the U.S. and Japan: the U.S., Caribbean, Gulf of Mexico and parts of the Atlantic Basin were hit by a series of hurricanes in August and September,” the bulletin noted. “For the first time since 1886, three hurricanes, Charley, Frances and Jeanne, made landfall in the same state – Florida; Ivan made landfall in Alabama, but continued its path across Florida.” Swiss Re estimated that economic losses from the four storms totaled $56 billion, while insured losses were estimated at around $27 billion. Ivan was the most costly with $22 billion in economic losses and $11 billion in insured losses.

“Japan experienced the highest number of typhoons for decades in the period June to October,” the bulletin continued. Typhoon Songda caused total economic losses of $6.2 billion, including property claims of $2.5 billion. The figures for Typhoon Tokage were $1.4 and $800 million, respectively; and for Typhoon Chaba, $1.8 billion and $700 million, respectively. “In addition, the region of Niigata, already reeling from Typhoon Tokage, was hit in October by the Chuetsu earthquake (registering 6.9 on the Richter scale) and strong aftershocks.

“The total economic losses caused by the earthquake and attendant landslides along with infrastructure damage are estimated at $19 to $28 billion, including insurance claims of $600 million. Europe had to cope with fewer natural catastrophes than in previous years. However, 191 people were killed and more than 2,000 injured in March following a terrorist attack on Madrid train stations.”

The greatest numbers of lives were lost in developing countries. Flooding in Haiti claimed more than 3,300 lives in May; in September, Hurricane Jeanne killed another 2,900 on the island. “Of the 21,000 victims of catastrophes recorded by sigma in 2004, almost half were in Asia or Africa: storms and flooding in the Philippines from mid-November to early December were responsible for over 1,700 deaths. In February, 640 people lost their lives in an earthquake in Morocco; and in March more than 360 people were killed by Cyclone Gafilo in Madagascar.”

In conclusion the bulletin cautioned: “It is still not possible to put a final figure on the losses, particularly in regions hit by more than one catastrophe. However, it is clear that, with insurance claims of around $42 billion, 2004 will go down as one of the most expensive in recent history. By way of comparison: in 1992, losses adjusted for inflation were in the region of $38 billion (including Hurricane Andrew); in 2001 they reached $37 billion (including the 11 Sept. terrorist attack); and in 1999, they totaled $36 billion (including the Lothar and Martin winter storms). Thus 2004 reinforces the trend towards higher losses, which can be attributed in part to rising population densities and value concentrations as well as to the growing urbanisation of exposed areas.”

Swiss Re plans to publish the comprehensive sigma study “Natural and man-made catastrophes 2004” in March 2005. Copies can be ordered by e-mail at: sigma@swissre.com.