Aon Benfield, the global reinsurance intermediary and capital advisor of Aon Corporation, has released its Annual Global Climate and Catastrophe Report, which reviews the natural disaster perils that occurred worldwide during 2010.
The survey is published by Impact Forecasting, Aon Benfield’s catastrophe model development center of excellence, and “highlights that global natural catastrophic activity was far higher than in the previous three years, with 314 separate events.”
The report calculated that the overall economic loss reached $252 billion, with insured losses of $38 billion. In 2009, 222 events resulted in a $58 billion economic loss and a $20 billion insured loss.
The figures are slightly higher than those recently released by Swiss Re, which calculated total economic losses at $222 billion, and insured losses at $36 billion.
The costliest event was the Chile earthquake with estimated losses of at $8.5 billion, while flooding in Pakistan caused the greatest single event economic loss, reported at more than $30 billion.
Stephen Mildenhall, CEO of Aon Benfield Analytics, commented “Despite no major US event, global insured catastrophe losses in 2010 amounted to nearly double those seen in 2009. The most significant insured event – and one of the most significant ever outside the US – was the February 27 Chile earthquake.
“The reinsurance industry provided ample capacity to handle the Chile event, and local companies benefited from prudent catastrophe risk based capital requirements and adequate reinsurance protection. At year end 2010 reinsurer capital has grown to record high levels. Reinsurance supply will continue to outpace demand putting further downward pressure on rates at January 1 and ensuring that reinsurance remains a highly accretive, cost-efficient form of capital for our clients.”
The top 10 insured loss events of 2010 – which caused $23 billion (61percent) of insured catastrophe losses – comprised five severe weather events (tornadoes, hail, severe thunderstorm winds), one winter-based storm event (snow, icing, cold temperatures and damaging winds), two earthquake events and two flood events.
The remaining $15 billion insured catastrophe losses were a combination of winter storms, severe weather, flooding, tropical cyclone activity, earthquakes and wildfires.
Steve Drews, Impact Forecasting Associate Director and Lead Meteorologist, observed: “The United States and South America were the dominant regions for insured losses in 2010, primarily due to damaging winter and springtime weather in the U.S, and the Chile earthquake in South America.
“Asia accounted for the majority of the economic losses, driven by flooding in Pakistan and China, while Haiti’s devastating earthquake also had little to no effect on global insurers and reinsurers. Had these large economic loss events occurred in areas with higher insurance penetration, 2010’s insured loss total would have been far greater.”
Steve Bowen, Meteorologist at Impact Forecasting, added: “While the U.S. saw three separate billion dollar insured loss events in 2010, the most interesting note is that none of the losses came as a direct result of a land falling hurricane. Despite the 2010 Atlantic Hurricane Season being the third most active on record, there were no hurricane landfalls in the U.S. for the second straight year. The season also marked the fifth consecutive year that the U.S. has avoided a major hurricane strike, with the last being 2005’s Hurricane Wilma in Florida .”
Source: Aon Benfield