Posted on 25 May 2012 by Neilson
A study by Swiss Re, a leading wholesale provider of reinsurance and insurance, found that natural catastrophes and man-made disasters caused unprecedented economic losses of $370 billion in 2011, up from $226 billion in 2010. Insured losses totaled $116 billion, up more than 140 percent from the previous year, because of record earthquake and flood losses. That was the second highest level of insured losses ever. Insured losses from earthquakes were the highest ever, $49 billion, and the floods in Thailand resulted in the highest insured losses ever for a single flood, $12 billion.
The earthquake in Japan accounted for 57 percent of 2011's economic losses. Losses from natural catastrophes that were insured came to $110 billion, while losses from man-made disasters were about $6 billion.
"Last year saw extraordinary and devastating catastrophic events., said Kurt Karl, chief economist at Swiss Re. "The earthquakes in Japan, New Zealand, and Turkey, as well as the floods in Australia and Thailand, were unprecedented and brought not only massive destruction but also the loss of thousands of people's lives.
The earthquake in Japan cost the insurance industry $35 billion, making it the most expensive earthquake on record. Lucia Revere, the company's senior catastrophe data analyst and co-author of the study, pointed out that "Japan's earthquake insurance protection is very low, particularly for commercial properties, so the insurance industry will bear only 17 percent of the total losses. Had Japan been more fully insured, 2011 would certainly have been the most expensive year ever also in terms of insured losses?' New Zealand has a lot of earthquake insurance, especially for residential properties. The February 2011 earthquake there, the third most expensive in history, triggered insurance claims of $12 billion, covering 80 percent of economic losses.