Debt crises here in the U.S. and Europe overshadowed this alarming fact: 2011 ranks as the worst ever for catastrophic economic losses from disasters, says reinsurance company Swiss Re.
The reinsurer says 2011 losses could still grow, due to expected winter storms in Europe and incoming claims from the ongoing floods in Thailand.
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Ranked as the five costliest insured disasters for the year, in this order, were: Japan’s deadly earthquake and tsunami; New Zealand’s earthquake; floods in Thailand, and two deadly tornadoes in the U.S.; Hurricane Irene ranked number six; floods in Australia came in seventh; and storms in the U.S. took the remaining three spots out of the top 10.
The US was the worst hit, as the country posted six of the top 10 most costly insured disasters in 2011.
Total economic losses to society, which include insured and uninsured losses, reached an estimated $350 billion, up from $226 billion in 2010.
The earthquake in Japan accounts for most of this year's economic losses. It was also the deadliest event, with most of the 30,000 people who lost their lives due to catastrophes in the first 11 months of this year coming from Japan.
Kurt Karl, Swiss Re’s chief economist, says in a statement: “2011 is going down as another year of very tragic and costly earthquakes. Unfortunately earthquake insurance coverage is still quite low, even in some industrialized countries with high seismic risk, like Japan. So on top of people losing their loved ones, societies are faced with enormous financial losses that have to be borne by either corporations, relief organizations or governments and, ultimately, taxpayers.”
Insured losses – the ones insurance companies are actually on the hook for – were $108 billion, up sharply from $48 billion in 2010, Swiss Re says.
This makes it the second-most expensive year for the industry after 2005, which posted $123 billion in insured disaster losses. Hurricanes Katrina, Wilma and Rita alone caused claims of over $100 billion for that year.
Swiss Re also notes in its statement that “if Japan had been as well insured as other countries with high seismic risk, such as New Zealand, the overall industry tally would have been much higher.”
It adds: “Even so, in terms of catastrophe claims, 2011 ranks as the second costliest year in history for the insurance industry.”
Europe’s winter storms and incoming claims from the ongoing floods in Thailand could push 2011 to the top of this ranking, Swiss Re adds.
RANKING OF 2011’SMOST COSTLY INSURED DISASTERS
1) Japan’s earthquake, tsunami, $36 BN insured losses 2) New Zealand earthquake, $12 BN 3) Thailand floods, up to $11 BN 4) US tornadoes, Alabama et al, $7.3 BN 5) US tornadoes, Missouri et al, $6.7 BN 6) Hurricane Irene, $4.9 BN 7) Australia floods, $2.3 BN 8) US storms, $2 BN 9) US storms, $1.5BN 10) US storms, $1.4BN
SOURCE: Swiss Re