Cost of global disasters hit record US$370b last year
Global economic losses from natural catastrophes and man-made disasters reached an unprecedented US$370 billion last year, the costliest recorded in history, according to reinsurance giant Swiss Re.
The Zurich-based company, the world's second-biggest reinsurer behind German firm Munich Re, had earlier estimated total economic losses - insured and uninsured - at US$350 billion from the previous high of US$226 billion in 2010.
It said in a study released yesterday that the devastation brought by the earthquake that struck Japan last March accounted for 57 per cent of the economic losses in 2011.
'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,' said Swiss Re chief economist Kurt Karl.
In January, Munich Re had calculated worldwide economic losses of about US$380 billion last year. That figure was also cited this month by Margareta Wahlstrom, the special representative for disaster risk reduction of the UN secretary-general.
Karl said the 'widespread lack of insurance protection worldwide' means that the staggering amount of economic damage last year 'will be shouldered by corporations, governments, relief organisations, and ultimately individuals'.
Yet the insurance industry managed to weather the extreme events and played a key role in bringing vital funds to affected populations, businesses, and governments.
Data from Swiss Re show that insured losses totalled US$116 billion, up 146 per cent from 2010. Natural catastrophe losses cost US$110 billion, while man-made disasters accounted for US$6 billion. The 9-magnitude earthquake that hit Japan killed about 19,000 people and set off the worst nuclear crisis in a generation. It cost the insurance industry an estimated US$35 billion in claims, making it the most expensive on record.
'Because Japan's earthquake insurance protection is very low ... the insurance industry will bear only 17 per cent of the total losses,' said Lucia Bevere, a senior catastrophe data analyst at Swiss Re.
Bevere said earthquake insurance penetration in New Zealand was high, particularly for residential properties. The 6.3-magnitude earthquake that struck the country in February last year triggered insurance claims of US$12 billion, which covered 80 per cent of economic losses.
Swiss Re ranked the insured claims of US$12 billion from the Thai floods as 'the highest ever recorded for a river water flood event'.