Swiss Re’s latest sigma report preliminarily estimates that total economic losses from natural catastrophes and man-made disasters will reach approximately $85 billion in 2015. Insured losses, however, were just $32 billion. In total, approximately 26,000 people lost their lives in disaster events in 2015, double the amount in 2014.
The insured loss estimates from natural catastrophes were lower than in 2014, while man-made losses were higher. “The explosions at the Port of Tianjin in China are expected to lead to the year’s biggest insured loss and the biggest man-made insured loss in Asia ever,” the report said.
Total economic losses for this year are lower than the $113 billion in 2014 and the previous 10-year loss average of $192 billion. “Natural catastrophes caused $74 billion in losses and man-made disasters the remaining $11 billion. Of the total economic losses, $32 billion were insured (vs. $35 billion the year before), with $23 billion triggered by natural disasters, down from $28 billion in 2014. This is also below the annual average of $55 billion for the previous 10 years of natural catastrophe insured losses.”
The report described 2015 as a “year of many disaster events. Losses were caused by various severe natural catastrophes across different perils in 2015, including windstorms, hurricanes, earthquakes, flooding and wildfires.
“A February winter storm in the U.S. was the largest loss-making natural disaster of the year, resulting in insured losses of more than $2 billion. Low activity during the North Atlantic hurricane season kept the total global insured loss low.”
The U.S. was far from alone in suffering from natural disaster, as a number of “large disasters occurred in many other parts of the world,” which resulted in “the total number of fatalities more than doubling from the previous year to around 26,000.
“In April, a magnitude 7.8 earthquake struck Nepal and neighboring countries, triggering a humanitarian catastrophe: around 9,000 people lost their lives and approximately 500 000 houses were destroyed. Economic losses are estimated to be more than $6 billion, of which only around $160 million are insured, owing to the country’s low insurance penetration.”
Swiss Re also noted that 2015 “is likely to pass as the warmest on record, according to the World Meteorological Organization. Exceptionally high temperatures and lack of rainfall caused drought, wildfires and heatwaves in many regions.
“More than 5,000 people died in waves of extreme temperatures throughout the summer season in India, Pakistan, Europe, North Africa and the Middle East. In India and Pakistan temperatures soared to above 48°C [118.4°F] in May and June, the highest recorded since 1995, claiming over 3 000 victims.”
Swiss Re’s Chief Economist Kurt Karl commented: “It was another year of many disaster events, sadly resulting in a high number of victims. The overall economic impact of these events was devastating in the areas affected. Often these areas are the least equipped and have a low level of insurance penetration.”
In addition a number of people lost their lives throughout the year as unseaworthy boats sank while loaded with migrants from conflict zones in northern Africa, attempting to reach Europe.
While the number of natural catastrophes declined in 2015, man-made disasters increased to $9 billion in overall insurance losses, up from $7 billion in 2014. The costliest event this year was the series of explosions at a storage facility in the Port of Tianjin in northeastern China on 12 August.
“The explosions claimed 173 lives and injured many more, as well as damaging and destroying vehicles, shipping containers, production facilities and surrounding property,” the report said. “The insured loss estimate is subject to a high degree of uncertainty due to the many different lines of business and coverage impacted, including potentially Contingent Business Interruption.
“Initial indications suggest claims of at least $2 billion, which would make this the largest ever man-made loss event in Asia for the insurance industry. Fires and explosions at other industrial sites and energy facilities in different regions added around $3 billion to the overall man-made insured tally.”
Swiss Re said it would compile and release an updated report “once full-year source data is complete.”
Source: Swiss Re
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