February 24, 2006 by Canadian Underwriter
About 400 natural catastrophes and man-made disasters in 2005 accounted for 97,000 deaths and damages totalling more than US$230 billion, according to a Swiss Re report.
Insurance covered about one third, or US$83 billion, of the damages. In the previous year, insured catastrophe losses had amounted to US$48 billion.
“[Year] 2005 turned out to be the costliest year ever for property insurers,” says the Swiss Re report, entitled Natural Catastrophes and Man-made Disasters 2005.
Swiss Re notes 2005 catastrophes caused US$230 billion of damage to buildings, infrastructure, vehicles, or losses to directly affected businesses. “Hurricane Katrina entailed the highest total damage by far, at US$135 billion,” the report says.
Claims to property insurers added up to US$83 billion including $78 billion as a result of natural catastrophes and $5 billion due to man-made disasters.
The hurricane season in 2005 broke several meteorological records: 27 named storms (breaking the previous record of 21 in 1933); of these, 15 storms reached hurricane windspeeds (breaking the 1969 record of 12 hurricanes). Also, for the first time ever, three hurricanes attained Category 5 strength, the highest on the Saffir-Simpson scale.
Man-made disasters triggered claims totaling US$5 billion worldwide, the costliest being explosions in oil-producing plants in Canada and the U.S., and fires at electronic equipment manufacturers in Taiwan and Malaysia.
Swiss Re notes more strong hurricanes are on the horizon. “The increase in hurricane losses is related to the warm phase of Atlantic multidecadal oscillation” (AMO) in the North Atlantic,” the Swiss Re reports says. “This warm phase started in 1995 and is expected to last for another 10 to 30 years.
“Given such climatological conditions, propitious to windstorms, the above-average hurricane activity can be expected to continue, entailing more intense hurricanes.”