Global natural catastrophes and man-made disasters highest since 2012

Downward trend in cat losses reversed, says Swiss Re

Total economic losses and global insured losses from natural catastrophes and man-made disasters in 2016 were the highest since 2012, reversing the downtrend of the previous four year, according to Swiss Re.

Globally there were 327 disaster events in 2016, of which 191 were natural catastrophes and 136 were man-made. In total, the disasters resulted in economic losses of US$175 billion, almost double the level in 2015. In terms of devastation wreaked, there were large-scale disaster events across all regions, including earthquakes in Japan, Ecuador, Tanzania, Italy and New Zealand. In Canada, a wildfire across the wide expanses of Alberta and Saskatchewan turned out to be the country’s biggest insurance loss event ever, and the second costliest wildfire on sigma records globally.

Worldwide, around 11 000 people lost their lives or went missing in disasters in 2016. There were a number of severe flood events in 2016, in the US, Europe and Asia. Hurricane Matthew, the first Category 5 storm to form over the North Atlantic since 2007, was also a major humanitarian disaster. Matthew caused the largest loss of life – more than 700 deaths, mostly in Haiti – compared to all single events this year.

Global insured losses last year were US$54 billion, significantly higher than in 2015 and in line with the inflation-adjusted annual average of the previous 10-years (US$53 billion). Natural catastrophes resulted in claims of US$46 billion, the same as the 10-year annual average. Insured losses from man-made disasters were US$8 billion, down from US$10 billion in 2015.

Insurance covered around 30% of the global economic losses resulting from disaster events in 2016. Some areas fared much better than others because of higher insurance penetration. For example, North America accounted for more than half the global insured losses. This was largely due to a record number of severe convective storms in the US, and because the level of insurance penetration for such storm risks in the US is high. The costliest was a hailstorm that struck Texas in April, resulting in economic losses of US$3.5 billion, of which US$3 billion, or 86%, were covered by insurance. With insurance, many households and businesses benefitted from insurance payouts for the heavy damage to their property caused by large hailstones.

However, insurance cover is not universal. Under-insurance against catastrophe risk is a reality in both advanced and emerging markets, and there is still large opportunity for the industry to help strengthen worldwide resilience.

Copyright © 2017 Transcontinental Media G.P.
Transcontinental Media G.P.