Disasters killed 15,000 people and cost the world 62 billion dollars in 2009, but the insurance industry could face a financial bill five times higher this year because of major earthquakes and storms, reinsurance giant Swiss Re said Tuesday.
Insurers covered damages of just 26 billion dollars for natural and man made disasters in 2009, a year of relatively low human and financial losses partly helped by a calm Atlantic hurricane season, Swiss Re said in a statement. But the huge earthquakes in Haiti on Janury 12 and Chile on February 27, as well as the European storm Xynthia, are already set to send damage payouts soaring this year, said Swiss Re chief economist Thomas Hess.
Twenty-two billion dollars of the insured damage last year was caused by natural disasters. “The probability that we see natural catastrophe losses as low as those in 2009 is less than 35 percent,” he said. “We have already seen significant events in 2010 with winter storm Xynthia in Europe or the earthquakes in Chile and Haiti. The industry is therefore well advised to prepare for much higher losses,” said Hess. “Given their high volatility, losses could easily be three to five times what they were in 2009,” he added.
Swiss Re estimated last week that economic losses from the earthquake in Chile could reach 15 billion dollars with the insurance industry set to pay up to 7.0 billion dollars in damages. By comparison, insurance cover is low in impoverished Haiti. Disaster damage is highly volatile from year to year but the overall trend has been growing over recent decades, according to Swiss Re. In 2005, insured losses soared to a record 120 billion dollars.
“I would not be surprised if this record is broken in the not too distant future,” Hess warned. Swiss Re’s annual study on natural catastrophes and man made disasters showed that insured losses were highest in North America last year, accounting for just under half of the global bill. The death toll was highest again in Asia, which accounted for 9,400 of the 15,000 victims of catastrophes and 2.4 billion dollars in insured losses.
Zurich, March 16, 2010 (AFP)
