March 12, 2003 by Canadian Underwriter
Insurers experienced below-average losses from catastrophes in 2002, according to a new sigma study by Swiss Re. Overall, natural and man-made losses cost p&c insurers US$13.5 billion (Cdn$19.9 billion) last year, with property losses below the long-term average since 1970.
Flood losses topped the list at US$4.1 billion (Cdn$6.1 billion) total, largely on the back of the European floods of late summer which caused US$3.2 billion (Cdn$4.7 billion) in insured damage. “Floods are posing a growing challenge to the insurance industry and the state,” notes a Swiss Re press release, which adds that much of the damage from the European floods was not insured, and total economic loss was US$15 billion (Cdn$22 billion). Swiss Re advocates for a private-public partnership on flood insurance to deal with the high amount of uninsured losses.
However, the loss total was still down below the long-term average, and substantially less than the US$35 billion (Cdn$52 billion) total for 2001, which was heavily impacted by World Trade Center losses.
Another switch from 2001 came as natural catastrophes cost more than man-made disasters, as is usual. Natural catastrophes led to US$11.4 billion (Cdn$16.8 billion) in losses, while man-made losses accounted for US$2.1 billion (Cdn$3.1 billion) of the total for 2002.
The other most costly events for insurers in 2002 include spring storms and tornadoes in the U.S. costing US$1.7 billion (Cdn$2.5 billion), Europe’s Storm Jeanett at US$800 million (Cdn$1.2 billion), Hurricane Lili which hit the U.S. and Caribbean in September at US$700 million (Cdn$1.03 billion) and Tropical Storm Isidore, which followed on Lili’s heels, at US$500 million (Cdn$738 million).
In human terms, the deadliest events of 2002 were social unrest in India in February and the Afghani earthquake in March, both of which left 2,000 dead or missing. The sinking of a Gambian ferry boat left more than 1,800 dead or missing, a cold wave in India cost 1,500 lives, and 1,460 people in Nigeria were dead or missing following the explosion at a munitions depot in January, 2002.