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Natural, man-made disasters caused $40 billion in insured losses last year


February 13, 2014   by Canadian Underwriter


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Natural and man-made disasters caused insured losses of around $40 billion last year, well below the 10-year average of $60 billion, risk and reinsurance specialist firm Guy Carpenter said in a report released Thursday.

“Last year will likely be known as the ‘year of the flood,’ with significant global flood events affecting Central Europe, Australia, Canada and the United States,” Julian Alovisi, vice president at Guy Carpenter commented in a press release.

“Although 2013 was relatively quiet compared to past years, several major events such as the tornado outbreaks in the U.S., floods, hail and windstorms in Europe and Typhoon Haiyan in the Philippines inflicted widespread devastation and significant losses on impact,” he noted.

Heavy summer rain leading to floods in Central Europe caused roughly $4.1 billion in insured losses and economic losses of $18 billion, according to the firm.

In July, Hailstorm Andreas also damaged approximately 100,000 properties and 50,000 cars in the northern and southern regions of Germany. The event became one of the costliest natural disasters to hit the country, with estimated insured losses of $3.7 billion.

Severe windstorms in Northern Europe in the fall and early winter also caused damage, with Windstorm Christian causing about $1.4 billion in insured losses and Windstorm Xaver $925 million.

Severe flooding in southern Alberta (causing insured losses of $2 billion) and flash flooding in the Greater Toronto Area last summer also meant Canada experienced its most expensive insured catastrophe loss year on record, Guy Carpenter said.

Among the man-made disasters, a major fire at a microchip factory in September in China caused reported costs to the reinsurance sector of $1.3 billion, the most expensive single-risk loss of the year, according to the firm.

Typhoon Haiyan, which hit the Philippines in November, also caused insured losses of $1.5 billion, according to the Philippine Insurers and Reinsurers Association, with a total loss of approximately $10 billion, according to Guy Carpenter.

Of note, last year’s Atlantic hurricane season was one of the most inactive on record.

“Heading deeper into 2014, we are very concerned about the water situation in the state of California,” James Waller, a research meteorologist for GC Analytics noted in the press release.

“In 2013, California experienced the lowest precipitation in recorded history for the state. This has already led to exceptionally severe drought conditions in the area. If these conditions continue to persist, lasting and significant impacts to water resources, agriculture and an aggressive wildfire season will be major areas of concern.”


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