Total economic losses from natural and man-made disasters in 2016 has surged to US$ 158 billion, 68% higher than the US$94 billion losses in 2015, with only a third of the total costs was insured, according to preliminary sigma
estimates released last week.
According to Swiss Re data, only a third of total global disaster costs, or US$49 billion, was insured, compared to US$ 37 billion in the previous year.
“The gap between total losses and insured losses in 2016 shows that many events took place in areas where insurance coverage was low,” the reinsurance powerhouse said in a statement.
The report also showed that the world is underinsured against earthquakes.
Kurt Karl, Swiss Re chief economist, said: "Society is underinsured against earthquake risk. And the protection gap is a global concern.”
“For example, Italy is the 8th largest economy in the world, yet only 1% of homes in Italy are insured against earthquake risk. Most of the reconstruction cost burden of this year's quakes there will fall on households and society at large."
Swiss Re identified Hurricane Matthew which lashed across the east Caribbean and southeastern US in October as the deadliest natural catastrophe of the year globally, accounting for US$8 billion, some US$4 billion of which was insured, and causing 733 deaths.
Canada’s Fort McMurray wildfires, meanwhile, was tagged by Swiss Re as one of the costliest wildfire events for insurers, incurring around US$2.8 billion in insured losses and US$3.9 billion in economic losses.
Another cause of large insurance losses in 2016 were several large scale-flood events in the US, Europe, and Asia.
This includes the widespread flooding in Louisiana and Mississippi which caused US$ 10 billion in economic losses, US$ 1 billion of which was privately insured; the heavy flooding in Europe in late May and early June which led to total losses of US$2.9 billion and insured losses of US$2.9 billion; and flooding across the Yangtze River which resulted to economic losses of at least US$ 16 billion.
Swiss Re said disaster events in 2016 took approximately 10,000 lives worldwide.
Global disaster costs ‘well below average’
Insured catastrophe losses surge by 42%