First-half losses make 2011 costliest year for natural disasters
An “exceptional accumulation” of severe natural catastrophes has already made 2011 the highest-ever loss year on record, even though the year is only just over halfway complete.
Munich Re said that the approximately USD $265 billion in economic losses to June 30 exceeds the total figure for 2005 which was previously the costliest year to date (at USD $220 billion for the year.) The insurer added that most of the losses were caused by Japan’s earthquake on March 11.
The 9.0 magnitude quake caused overall economic losses of $210 billion, said the insurer. The strongest earthquake ever registered in Japan, it was also the costliest natural disaster on record, more expensive than 2005’s Hurricane Katrina with caused losses of $125 billion. However, Munich Re says that the $30 billion claims burden for the insurance industry will not attain the level of insured losses caused by Hurricane Katrina.
For the first six months of the year, Munich Re said that the loss amount was more than five times higher than the first-half average for the past ten years. The insured losses, around US$ 60bn, were also nearly five times greater than the average since 2001. “First-half losses are generally lower than second-half losses, which are often affected by hurricanes in the North Atlantic and typhoons in the Northwest Pacific. The total number of loss-relevant natural events in the first six months of 2011 was 355, somewhat below the average for the previous ten years (390),” the company wrote.
““The role of insurance in such a case is to bear these seldom catastrophe losses and, by so doing, assist with the rebuilding effort and the economic recovery of the region concerned. We were not surprised by any of the events when seen as single events, since they were within the range of what our risk models led us to expect. The accumulation of so many severe events of this type in such a short period is unusual, but is also considered in our scenario calculations. Thanks to our risk know-how and financial strength, we are able to exploit business opportunities that arise following the increased demand for risk transfer, which is often accompanied by a decreasing supply of capacity,” said Munich Re board member Torsten Jeworrek.
