Global insured losses put at US$37 billion for 2015

Global insured losses put at US$37 billion for 2015 | Insurance Business New Zealand

Global insured losses put at US$37 billion for 2015
Global insured losses from both natural catastrophes and man-made disasters were US$37 billion last year, below the US$62 billion annual average of the last 10 years, according to the latest sigma study by reinsurer Swiss Re.

Total global economic losses from all disasters were US$92 billion, with only about 40% of these losses insured.

Of the 353 disaster events last year, 198 were natural catastrophes, which is the highest number in one year, according to sigma records, and the Nepal earthquakes caused the most damage, at US$6 billion.

The biggest insured loss of the year, at an estimated property loss of between US$2.5 – 3.5 billion, was caused by the two large explosions at Tianjin port in China last August.

The nature of the Tianjin blast, which resulted in 173 victims, prompted a special chapter devoted to it in the sigma report, as it put a spotlight on accumulation risk in large transportation hubs such as ports.

“The imposition of an exclusion zone at the site due to the risk of follow-up explosions and clean-up operations made it very difficult for insurers to assess the losses arising from the many damaged or destroyed assets, such as the many cars in transit at the port,” the study said.

“The severity of the blasts and large asset exposures at the time mean that Tianjin, in addition to being the largest insured loss event of 2015, is the biggest man-made insurance loss event ever recorded in Asia, and also one of the biggest man-made insurance loss events worldwide, ever.”

Indeed, it ranked third on the list, following the 9/11 terrorist attack in 2001, with 2,982 victims and insured losses of US$25.2 billion, and the Piper Alpha explosion in 1988, which resulted in 167 victims and insured losses of US$3.0 billion.

Asia fared the worst with the most losses in 2015. Economic losses from all events in Asia were close to US$38 billion.
As well as the Nepal earthquakes and Tianjin explosions, other high loss events included Typhoon Goni in Japan and flooding in southern India.

Swiss Re’s chief economist Kurt Karl said: “The earthquake in Nepal struck close to the capital in Kathmandu, causing widespread devastation and losses, which were mostly uninsured.

“Yet again, tragedy has hit an area where people are least able to protect themselves.”

The study also revealed that while the level of losses globally was low compared with the previous 10-year annual average, this was down to another benign hurricane season in the US.

The biggest loss came from a mid-February winter storm that caused damage in 17 states, with Massachusetts hit hardest.
Despite the harsh winter in the US, 2015 overall was the hottest year on record.

Heatwaves claimed a number of lives all over the world, while long stretches of high temperatures and lack of rainfall caused drought and wildfires in many regions.

The US had its worst year for wildfires since 1960, with Indonesia and Australia being the other countries impacted by wildfires.

Meanwhile, regions such as India and the UK experienced extreme precipitation events.

The city of Chennai, India, was paralysed by flooding after accumulated rainfall of more than 500 mm in November alone.

This was followed by large swathes of the UK being under water in December due to multiple rainstorms.

Preliminary estimates put the insured losses from the UK floods at around US$2 billion.

“Global weather patterns deviated from climate norms in 2015, with El Nino being a contributing factor,” the study said.
“For instance, tropical storm activity in the North Atlantic was suppressed, while it was a very active season in the Pacific.”