Catastrophes Cost World $222 Billion in 2010: Swiss Re

According to initial estimates from Swiss Re’s sigma research team, worldwide economic losses from natural catastrophes and man-made disasters totaled $222 billion in 2010; more than triple the 2009 figure of $63 billion.

The cost to the global insurance industry “was $36 billion, an increase of 34 percent over the previous year. Approximately 260,000 people died in these events, the highest number since 1976.”

The death toll rose sharply from the 15,000 people who died as a result of natural catastrophes in all of 2009. The deadliest event in 2010 was the Haiti earthquake in January, which claimed more than 222,000 lives. Approximately 15,000 people died during the summer heat wave in Russia. The summer floods in China and Pakistan also resulted in 6,225 deaths.

Natural catastrophes cost the global insurance industry roughly $31 billion in 2010, and man-made disasters triggered additional claims of approximately $5 billion. Overall insured losses totaled $27 billion in 2009.

Swiss Re pointed out that, “despite notably higher than average earthquake losses, overall claims in 2010 were in line with the 20-year average due to unusually modest US hurricane losses. However, the estimate of $36 billion is still subject to uncertainty due to, amongst other things, the ongoing European winter storm season.”

The world has experienced eight events, so far, which have caused losses in excess of $1 billion. The costliest event in 2010 was the earthquake in Chile in February, which cost the insurance industry $8 billion, according to preliminary estimates.

The earthquake that struck New Zealand in September cost insurers roughly $2.7 billion. Winter storm Xynthia in Western Europe led to insured losses of $ 2.8 billion. Property claims from the BP Deepwater Horizon explosion in the Gulf of Mexico are estimated at $1 billion. However Swiss Re noted that “given the complexity of the claims, the figure is still subject to substantial uncertainty. The overall insurance loss is higher, as liability losses are not included in the sigma numbers. Floods in France during the month of June caused insured losses just below $1 billion.”

Thomas Hess, Chief Economist of Swiss Re, commented: “The humanitarian catastrophes again showed how important prevention and post disaster management are for protecting the lives and health of people affected by natural hazards.

“They also revealed large differences in how developed insurance systems are in the affected countries and how important insurance is in coping with the financial consequences of disasters. While most of the costliest events caused by the earthquakes in Chile and New Zealand and the winter storm in Western Europe were covered by insurance, events like the earthquake in Haiti and floods in Asia were barely insured.”

Source: Swiss Re