August 11, 2015 by Canadian Underwriter
Total economic losses from natural catastrophes and man-made disasters reached US$37 billion in the first half of 2015, with the global insurance industry covering nearly 45% of these losses (US$16.5 billion), according to preliminary sigma estimates released on Tuesday by Swiss Re. The previous 10-year average was that global insurers covered about 27% of losses.
Natural catastrophes caused total economic losses of US$33 billion in the first half of the year, well below the US$54 billion in H1 2014 and also the average first-half year loss over the previous 10 years (US$99 billion), Swiss Re reported. Of the overall insured losses, US$12.9 billion came from natural disasters, down from nearly US$20 billion in the first half of 2014 and again below the average first-half year loss of the previous 10 years (US$25 billion). [click image below to enlarge]
The costliest natural catastrophes for the insurance industry resulted from severe winter weather and thunderstorms in the United States and Europe, Swiss Re said. In February, a winter storm in the northeastern U.S. caused insurance losses of US$1.8 billion, the highest loss of any event so far this year. Man-made disasters, meanwhile, triggered an additional US$3.6 billion in overall insurance losses in the first half of this year.
Swiss Re said that approximately 18,000 people lost their lives in disaster events in H1 2015, up from more than 4,800 in the first half of last year. The earthquakes in Nepal, and a heatwave in India and Pakistan, claimed the highest number of victims. There were more than 9,000 fatalities in the earthquakes that struck Nepal in close succession in April and May. Economic losses in Nepal were estimated at more than US$5 billion, but only about US$160 million were insured losses. [click image below to enlarge]
“The tragic events in Nepal are a reminder of the utility of insurance,” said Kurt Karl, chief economist at Swiss Re, in the release. “Insurance cover does not lessen the emotional trauma that natural catastrophes inflict, but it can help people better manage the financial fallout from disasters so they can start to rebuild their lives.”
In the same region, India and Pakistan were hit by a severe heat wave in May and June. Temperatures soared to 48°C, the highest recorded since 1995. It is estimated that more than 2,500 people died in India and 1,500 in Pakistan as a result of the extreme heat, Swiss Re reported.