January 2, 2003 by Canadian Underwriter
While 2002 was a relatively easy year for insurers in terms of cat losses, significant flooding in Europe points to potential concerns in the future, suggests a Swiss Re sigma report.
In total, more than 300 man-made and natural catastrophes last year resulted in about US$40 billion in economic loss, about US$12 billion of which insurers are on the hook for.
Economic loss has averaged US$68 billion since 1990, and insured damages have averaged US$21.5 billion. Taking the tally since 1970, the US$12 billion in insured losses is in line with the average annual loss figure.
“After the extraordinary losses of 2001, financial losses resulting from catastrophes returned to more average levels in 2002,” states a press release from Swiss Re. “However, as the European floods show, large losses remain a real threat.”
Those floods, which hit several countries in July and August totaled US$3.2 billion in insured damages, and mark the largest natural cat loss last year. There were followed by April tornadoes in the U.S. costing US$1.5 billion, Hurricane Lili at US$650 million and November hail and tornadoes across the U.S. causing US$500 million in insured damages. Floods in France last September round out the top five events with $400 million in insured losses.
In total, natural catastrophes cost insurers US$10 billion, while man-made catastrophes, including major fires, aviation and space losses, totaled US$2 billion.
In human terms, last year saw 19,000 deaths as a result of catastrophes, the worst being earthquakes in Afghanistan in March that took 2,000 lives and the explosion of a Nigerian ammunition dump last January that killed 1,460 people.