Disaster losses continue to dip for insurance industry

by Jordan Lynn 14 Aug 2015

Disaster losses continue to dip for insurance industry

Losses from natural and man-made disasters continue to trend downward as the insurance industry covers more risk than a year ago, a recent study has found.

The preliminary Sigma Study, released by Swiss Re, found that losses from disasters had dipped considerably over the first half of the year.

Total economic losses from natural disasters in the half year reached US$33 billion, well below last year’s US$54 billion and the ten-year average of US$99 billion.

The global insurance industry covered nearly 45% of total losses from both man-made and natural disasters which saw US$16.5 billion of losses covered in the first six months of the year.

Natural disasters caused US$12.9 billion in insured losses, down from almost US$20 billion last year and below the 10 year average of US$25 billion.

With economic trends pointing down, deaths related to disasters sky-rocketed when compared with last year as approximately 18,000 people lost their lives in disaster events in the first half of this year compared with 4,800 last term.

The worst disasters of the first half of the year were concentrated in Asia with the Nepal earthquakes and heat waves in India and Pakistan a devastating combination.

"The tragic events in Nepal are a reminder of the utility of insurance," Kurt Karl, chief economist at Swiss Re, said of the findings.

"Insurance cover does not lessen the emotional trauma that natural catastrophes inflict, but it can help people better manage the financial fallout from disasters so they can start to rebuild their lives.”