Preliminary Swiss Re ‘sigma’ Report Estimates 2007 Cat Losses

Swiss Re has released a preliminary “sigma” report detailing the extent of 2007’s catastrophe losses. According to its initial estimates, more than 20,000 people were killed by natural and man-made catastrophes in 2007; overall financial losses from catastrophes were $61 billion across the globe, while property insurers had to contend with losses totaling $25 billion.

Swiss Re’s report notes that three insured losses were in the “billions in Europe, two in North America and one in Asia.” It also stressed that the estimates are “preliminary” and will be followed up in a more detailed Re “sigma” report on natural catastrophe losses in 2008.

Property insurers paid out more than $22 billion for natural catastrophes in 2007, where Europe was “unusually hard-hit by natural catastrophes,” Swiss Re stated. “In January, Germany, the UK, Belgium and the Netherlands reported losses from winter storm Kyrill. During the summer, the UK was also hit twice by heavy rains and flooding.

“In the US, a winter storm struck the East Coast of the US in April, bringing with it heavy rainfall, which resulted in flooding. At the end of October, the Witch forest fires raged in California. As these woodland areas are densely populated, these fires caused extensive property damage, and are therefore referred to as ‘urban forest fires.’ The fires in California are associated with the heat and extreme lack of rainfall. Japan was spared record losses, whereas Australia reported flood and storm damage in New South Wales (NSW) in June.”

More than $2 billion in insured losses were created by man-made catastrophes, the report indicated. These included “major industrial fires, explosions and aviation and spacecraft losses at the top of the list. Insured property losses were approximately of the same magnitude as those in 2006.”

Swiss Re concluded that “although the insured losses, at $25 billion, were $9 billion higher than in the previous year, 2007 is below the long-term loss trend. The large losses occurred in the first half of the year and were concentrated in Europe.

“The second half of the year – as of 11 December 2007 – has been less eventful. Over the course of the year, more than 20 000 people died in catastrophes. Bangladesh, for example, was hit several times by natural disasters, with Cyclone Sidr destroying extensive parts of the country’s south-western region in Mid-November, at a cost of more than 4 000 lives. In July and August, the country was also hard hit by monsoon rains and landslides.”

The full report, with tables of the most serious natural and made catastrophes, may be obtained on the Swiss Re web site at: www.swissre.com.

Source: Swiss Re