2003 catastrophes cost insurers US$18.5 billion

2003 will go down as a costly year for catastrophes, most significantly in human terms, with 60,000 people losing their lives in 380 catastrophic events, according to Swiss Re’s annual sigma study of catastrophes. Most serious was the earthquake striking the Bam region of Iran, killing 41,000 people last December. In fact, 2003 will go down as the seventh most deadly year in the last three decades.
Overall economic losses were US$70 billion, with US$14 billion of this coming from drought conditions in Europe. The heat wave hitting Europe this past summer also lead to intense flash flooding, with Swiss Re noting that such events offer further evidence to those who foresee a rise in extreme weather events.
Insurers faced a hefty price tag in 2003, although overall the year is classified as moderate. Insurers paid our US$18.5 billion, mainly on natural catastrophes. 2003 will be remembered as a year where insurers faced multiple billion-dollar-plus events, all hitting North America. Severe weather in April and May in several U.S. states combined cost insurers US$4.8 billion, Hurricane Isabel left a price tag of US$1.7 billion, and the two California wild fires cost US$2.1 billion combined.
Man-made catastrophes totaled just US$2.3 billion in insured losses, including large industrial fires, explosions and satellite losses.
Significantly, 2003 carried on the tradition of losses rising into the billions of dollars, a trend on the rise since 1970, Swiss Re notes. “There are strong indications that the billion-dollar loss trend will continue, and the 2003 figures confirm this trend towards high losses, which is being driven by increasingly densely populated areas, higher concentrations of insured values and the development of endangered zones.”