According to initial estimates from Swiss Re’s sigma team, worldwide economic losses from natural catastrophes and man-made disasters were $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% over the previous year. Approximately 260,000 people died in these events, the highest number since 1976.
In 2010, severe catastrophes claimed significantly more lives than the previous year: nearly 260,000 were killed, compared to 15,000 in 2009. The deadliest event in 2010 was the Haiti earthquake in January, claiming 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.
High earthquake losses in 2010
Natural catastrophes cost the global insurance industry roughly USD 31 billion in 2010, and man-made disasters triggered additional claims of approximately USD 5 billion. By way of comparison, overall insured losses totalled USD 27 billion in 2009. 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 USD 36 billion is still subject to uncertainty due to, amongst other things, the ongoing European winter storm season.
Eight events triggered losses of over USD 1 billion each
In the first eleven months of 2010, eight events each triggered insurance losses in excess of USD 1 billion. The costliest event in 2010 was the earthquake in Chile in February, which cost the insurance industry USD 8 billion, according to preliminary estimates. The earthquake that struck New Zealand in September cost insurers roughly USD 2.7 billion. Winter storm Xynthia in Western Europe led to insured losses of USD 2.8 billion. Property claims from the BP Deepwater Horizon explosion in the Gulf of Mexico are estimated at USD 1 billion. 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 USD 1 billion.
Natural catastrophes and man-made disasters cost society USD 222 billion in 2010
These devastating events caused economic losses to soar to an estimated USD 222 billion, compared to USD 63 billion in 2009.
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.”