Global insurance industry sees spike in natural catastrophe claims in 2010

Natural catastrophes cost the global insurance industry roughly $40 billion in 2010, and man-made disasters triggered additional claims of more than $3 billion, marking a significant spike over the total insured losses of $27 billion in 2009, reported Swiss Re.
Though hurricane losses were lower than usual in 2010, the industry saw a spike in claims originating from earthquake events, Swiss Re said in its sigma study.
Regionally, Swiss Re noted overall insured losses in 2010 were the highest in North America, where they exceeded $15 billion. Although hurricane losses remained low during the year, a series of lesser storms resulted in the high figure, Swiss Re said.
Ten events triggered insured losses of $1 billion or more each in 2010. Natural catastrophe claims were in line with the 10-year average due to unusually modest U.S. hurricane losses, and in spite of notably high earthquake losses.
Earthquakes caused the two biggest insured losses in 2010 – the February earthquake in Chile ($8 billion) and the September earthquake in Christchurch, New Zealand ($4.4 billion). In total, earthquake losses accounted for almost one-third of all catastrophe losses last year, Swiss Re reported.
Earthquake losses for 2011 will also be above average. Total insured claims for the Feb. 22, 2011 earthquake in Christchurch, New Zealand are estimated to be between $6 billion and $12 billion. The massive quake in Japan on Mar. 11, 2011 is expected to trigger significant insured losses, Swiss Re continued.
“Although no long-term trend of increasing global earthquake activity has emerged, the number of fatalities and insured losses from earthquakes are on the rise,” said Balz Grollimund, an author of the study. “The main reasons are population growth, the higher number of people living in urban areas as well as rising wealth and rapidly increasing exposures.”