While there is no denying the good news that fewer people have died as a result of natural disasters in the first half of 2016, the reasons to celebrate were tainted for insurers.
That’s because even though the death toll has slumped, the economic cost has risen sharply, according to estimates from the world’s largest reinsurance company Munich Re.
According to its figures, the economic cost of these events spiralled by about a fifth compared to the previous year to reach $70 billion during the first six months of 2016. However, this was still below the average figure for the last decade which stands at $92 billion.
According to the data, the increased cost is reflective of the price for rebuilding infrastructure and homes. Insurance was responsible for covering $27 billion of losses during the first half of the year: that compares to $15 billion as the long-term average.
According to Munich Re the figures support the suggestion that much of the world is under-insured and that insurance could play a greater part in aiding economic recovery following a disaster. It is estimated that a quarter of the $25 billion in losses from two earthquakes in Japan was insured.
As for the number of people killed, that reached 3,800 during the first six months of 2016 – a substantial fall from the 21,000 who died in the same period last year. The earthquake in Ecuador led the way in terms of natural disasters, claiming 700 lives.
In terms of Europe, there were $6.1 billion in damages primarily caused by storms.
Emerging markets to drive insurance growth over the next decade, Munich Re