Wednesday, December 19, 2012

Insurers to pay for close to half of the USD 140 billion in economic losses caused by natural catastrophes and man-made disasters

My former employer has come out with a new issue of their excellent risk publication:
  • Economic losses from natural catastrophes and man-made disasters will likely reach at least USD 140 billion in 2012
  • Weather events, primarily in the US, will dominate insured losses this year
  • The re/insurance industry will cover approximately USD 65 billion of all losses, significantly contributing to post-disaster relief
According to Swiss Re sigma preliminary estimates, total insured losses from natural catastrophes and man-made disasters will reach approximately USD 65 billion in 2012. Natural catastrophes alone will lead to over 11 000 lives lost and roughly USD 60 billion in insured claims.

After a benign first half of the year, Hurricane Sandy and drought in the US in the second half of 2012 will lead to total economic losses from disasters of at least USD 140 billion. Insured losses arising from the catastrophic events of the year are set to reach roughly USD 65 billion. The tally is moderate compared to 2011, which saw historic insured losses of over USD 120 billion due to record earthquakes and flooding, but is above the average of the last 10 years.

Kurt Karl, Swiss Re’s Chief Economist, says: "Severe weather events continue to affect many parts of the world. Although insurance cannot bring back lost lives, many people and businesses can rely on financial relief from insurance cover, as is the case for the US. However, in large parts of the globe that are prone to severe weather events, people and businesses could increase risk-preparedness by eliminating underinsurance."...

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