According to Swiss Re’s latest sigma study, worldwide economic losses from natural catastrophes and man-made disasters were USD 218 billion in 2010, more than triple the 2009 figure of USD 68 billion. The cost to the global insurance industry was more than USD 43 billion, an increase of more than 60% over the previous year. Approximately 304 000 people died in these events, the highest number since 1976.
In 2010, severe catastrophes claimed significantly more lives than the previous year: around 304 000 were killed, compared to 15 000 in 2009. The deadliest event in 2010 was the Haiti earthquake in January, which claimed more than 222 000 lives. Nearly 56 000 people died during the summer heatwave in Russia. The summer floods in China and Pakistan also resulted in over 6 200 deaths.
Natural catastrophes cost the global insurance industry roughly USD 40 billion in 2010, while man-made disasters triggered additional claims of more than USD 3 billion. By way of comparison, overall insured losses totalled USD 27 billion in 2009.
High earthquake losses
Earthquake losses accounted for almost one third of all catastrophe losses in 2010. The February 2010 earthquake in Chile and the September earthquake in New Zealand were the two costliest events in 2010, and led to insured losses estimated at USD 8 billion and USD 4.4 billion respectively. Overall natural catastrophe claims in 2010 were in line with the 10-year average due to unusually modest US hurricane losses and in spite of notably high earthquake losses.
Incidentally, earthquake losses for 2011 will also be above average as the total insured claims for the February 22 earthquake in Christ-church, New Zealand, are estimated to be between USD 6 billion and USD 12 billion. The massive Tohoku earthquake that struck Sendai, Japan on March 11 is also expected to trigger significant insured losses.
Ten events each triggered insured losses of at least USD 1 billion
In 2010, ten events triggered insured losses of USD 1 billion or more. The two biggest insured losses were caused by earthquakes – the February earthquake in Chile (USD 8 billion) and the September earthquake in Christchurch, New Zealand (USD 4.4 billion). The third costliest event was winter storm Xynthia in Western Europe, which led to insured losses of USD 2.8 billion. Three storms in the US and two storms in Australia also generated losses of over USD 1 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 latter figure is still subject to substantial uncertainty. The overall insurance loss is higher, as liability losses are not included in the sigma numbers.
Natural catastrophes and man-made disasters cost society
In 2010, worldwide economic losses from natural and man-made catastrophes were estimated at USD 218 billion. This represents a sharp increase over 2009, when economic losses totalled USD 68 billion. Asia was the hardest-hit region with total damages of approximately USD 75 billion. Pakistan and several large regions in China experienced extraordinary rainfall during the summer, resulting in devastating floods.
Thomas Hess, Chief Economist of Swiss Re, comments: ”2010 was not only characterised by severe earthquakes that ranked among the deadliest, costliest and most powerful in history, but also by a series of extreme weather events, such as major floods. Some of these flood events sadly affected countries with poor emergency preparedness and underdeveloped insurance markets.”