Global disaster events cost insurers $34 billion in 2014: Swiss Re

At US$34 billion, estimated insured losses from natural catastrophes and man-made disasters in 2014 were still high, despite being well below recent annual averages and being significantly below the US$45 billion tab for 2013, note preliminary estimates from Swiss Re’s sigma.

Sigma figures released Wednesday show that of the US$34 billion in estimated insured losses in 2014, US$29 billion were triggered by natural catastrophe events compared with US$37 billion in 2013, notes a statement from Swiss Re, a wholesale provider of reinsurance, insurance and other insurance-based forms of risk transfer. Man-made disasters generated the additional US$5 billion in preliminary insurance losses for 2014.

The estimates include all latest updates to source data made by Nov. 28, 2014.

Estimated insured losses were slightly less than a third of total economic losses from disaster events in 2014, which reached US$113 billion worldwide. Total economic losses were also down from the US$135 billion in 2013.

Of the estimated total economic losses in 2014, natural catastrophes caused US$106 billion – down from US$126 billion in 2013 – and the outcome is well below the average annual US$188 billion loss figure of the previous 10 years, Swiss Re reports.

Total loss of life at 11,000 as a result of natural catastrophe and man-made disaster events around the world in 2014 was also down from the more than 27,000 fatalities in 2013.

Some specific events in North America contributing to the preliminary loss estimates are as follows:

• the storms in the United States at the beginning of 2014 caused insured losses of US$1.7 billion – above the average full-year winter storm loss number of US$1.1 billion of the previous 10 years;
• a spate of strong storms with large hail stones in mid-May that hit many parts of the U.S. over a five-day period resulted in insured losses of US$2.9 billion – the highest of the year; and
• Mexico was impacted by Hurricane Odile in September, with strong winds and heavy rains leading to insured losses of US$1.6 billion. The hurricane, the second most costly catastrophe event ever in Mexico, hit tourist resort areas where there are a number of hotels and where commercial insurance penetration is relatively high.

Other events worldwide included the following:

• extreme winter conditions in Japan at the beginning of the year;
• Typhoon Hagupit in the Philippines in December – early loss estimates indicate less damage than Typhoon Haiyan caused in 2013;
• a series of small loss-inducing weather events in different countries in Europe at the start of 2014, one major event being June’s wind and hailstorm (Ela), which caused significant damage to properties and vehicles in parts of France, Germany and Belgium, resulting in overall insured losses of US$2.7 billion;
• hail in Bulgaria in June;
• heavy rains and flooding in the United Kingdom, Serbia, Croatia, Italy and France over the course of the year;
• monsoon rains in September that caused extensive flooding and damage across India and Pakistan (resulting in the largest number of lives lost from any flood during the year);
• Cyclone Hudhud in India; and
• a very dry summer in some areas in China, leading to severe drought conditions that affected agricultural output.