Jan
4
Natural Catastrophes in 2010 Cost Insurers Billions
By Thomas | Published January 04, 2011
The occurrence of natural catastrophes in 2010 made last year one of the worst for insurers in terms of compensation payments since 1980. This position is outlined in a report by German reinsurance experts Munich Re. The worldwide natural events included the effects of earthquakes, heat waves and floods contributing towards US$37 billion (€28 billion) of insured losses being recorded by insurers during the year.
Munich Re, the world’s largest re insurer, reported that claims payments for natural disasters exceeded the annual average losses of US$35 billion (€26 billion) over the last decade, incurring US$37 billion (€28 billion) in insured damages in 2010 compared to losses of US$22 billion (€16 billion) in 2009.
During 2010, a total of 950 natural catastrophes were recorded, with nine-tenths being related to weather conditions such as storms and flooding. This made 2010 one of the worst years for natural catastrophes since records began 30 years ago and exceeded the annual average of 785 natural catastrophic events by 21 percent. The total cost of remedying the impact of natural events worldwide amounted to roughly US$130 billion (€97 billion), with US$37 billion (€28 billion) of the total losses being covered by insurance.
In 2010 there were five events categorized under the United Nations (UN) term “great natural catastrophes”. These were earthquakes in Haiti, Chile and Central China, a heat wave in Russia and floods in Pakistan. The five great natural catastrophes during the year resulted in the majority of fatalities arising from natural events and accounted for just under half of the overall insured losses.
The devastating earthquake in Haiti on the 12th January 2010 was one of the worst recorded over the last 100 years killing more than 220,000 people; only the earthquake in Tangshan, China caused more fatalities – 242,000 – in 1976. Although the Haiti earthquake resulted in thousands of lives being lost and a major destruction of the country, the costs adsorbed by the insurance industry were relatively small, which is often the situation with events of this nature in under-developed countries.
The Chilean earthquake on the 27th of February 2010 reached a magnitude of 8.8 on the Richter scale and was the most costly natural disaster for the insurance industry, with overall losses amounting to US$30 billion (€22 billion) of which US$8 billion (€6 billion) was covered by insurance. Global insurers had high levels of earthquake exposure in Chile because of the historic risks of similar events occurring in the country offset by the strict building codes applied during construction. Although the Chilean earthquake was the fifth strongest ever measured, the building protocol in the country helped to minimize fatalities – but over 500 lives were still lost.
In Pakistan, rainfall from monsoons between July and September lead to one-quarter of the country being flooded for weeks, causing havoc and disease for many millions of the country’s population. The overall cost of the flooding was assessed at US$9.5 billion (€7 billion) – a significant sum of money for a country with an emerging economy.
In Russia and neighboring countries the heat wave between July and September lead to catastrophic events. Much of Russia, including Moscow, was affected by unprecedented high temperatures, which exceeded 30°C for months. The heat wave lead to forest fires, which threatened Russia nuclear facilities and the radioactive fallout areas from the Chernobyl disaster which remain contaminated after the 1986 nuclear plant accident. The extreme temperatures resulted in more than 55,000 lives being lost through heat and air pollution, resulting in Russia’s worst natural disaster in history.
Another hazard which occurred in 2010, and highlighted the vulnerability of the global economy to natural events, was the eruption of the volcano Eyjafjallajökull on Iceland in April. The eruption of the Icelandic volcano demonstrated how the global transportation network can be brought to a stand-still by a natural event. Due to dust particles emitted by the volcano Eyjafjallajökull much of air travel through northern Europe was paralyzed causing the supply of goods, business activities and personal travel to be severely affected. Although only a low level of damage was reported, the volcanic eruption caused airlines to lose many millions in revenue and impacted on the general economy.
The disposition of occurrences of natural catastrophes in 2010 was similar to previous years, with the American and Asian continents recording the highest number of events – at 365 and 310 events respectively. The remaining natural catastrophes saw Europe recording 120 events, Africa 90 and 65 in Australia/Oceania. Within Europe the winter storm Xynthia caused an overall loss of US$6.1 billion (€4.5 billion) – this mainly affected Spain and France – and along with other European windstorms combined to cause damage totalling US$3.1 billion (€2.3 billion), making losses from natural catastrophes unusually high for the region.
The United States, which is normally impacted by the hurricane season, was not severely hit by hurricanes during 2010 due to favorable weather patterns. However, neighboring Mexico had a number of storms which lead to substantial damage in the country, with Hurricane Karl causing an overall loss of US$ 3.9 billion (€ 2.9 billion), with US$150 million (€112.2 billion) being insured. While there were hurricanes throughout 2010 many either turned away from North America and headed towards the North Atlantic or struck the Caribbean islands with minimal effect.
However, while hurricanes caused minimal damage to property in 2010, the number of intensive storms was one the highest over the last 100 years. There were a total of 19 tropical cyclones during the year, making it the third highest in recorded history. Although, 2010 was a quiet year for insurers covering hurricane damage, it is still important to monitor storm activity to measure the likelihood of hurricanes making landfall and causing significant destruction with consequential losses for insurers.
Torsten Jeworrek, Munich Re’s Reinsurance CEO said: “2010 showed the major risks we have to cope with. There were a number of severe earthquakes. The hurricane season was also eventful – it was just fortunate that the tracks of most of the storms remained over the open sea. But things could have turned out very differently. The severe earthquakes and the hurricane season with so many storms demonstrate once again that there must be no slackening of our efforts to analyse these risks in detail and provide the necessary insurance covers at adequate prices. These prices calculated by the insurance industry make it possible to assess the economic consequences of these otherwise difficult-to-evaluate risks.”
Natural catastrophes are events which occur globally with all insurers sharing risks which are taken into account when structuring their business forecasts. While natural disasters are difficult to predict, insurers use reinsurance to minimize potential losses.
The report highlights the costs which can arise from natural causes and the benefits the insurance industry is able to secure in quantifying these risks and providing financial assistance in remedying the consequences of catastrophic events.
Insurance Company Mentioned:
Munich Re
Munich Re stands for exceptional solution-based expertise, consistent risk management, financial stability and client proximity. This is how Munich Re creates value for clients, shareholders and staff. It operates in all lines of insurance, with around 47,000 employees throughout the world. Especially when clients require solutions for complex risks, Munich Re is a much sought-after risk carrier. The primary insurance operations are mainly concentrated in the ERGO Insurance Group. ERGO is one of the largest insurance groups in Europe and Germany and 40 million clients in over 30 countries place their trust in the services and security it provides. In international healthcare business, Munich Re pools its insurance and reinsurance operations, as well as related services, under the Munich Health brand.
Comments
36 Responses to “Natural Catastrophes in 2010 Cost Insurers Billions”
Leave a Reply
Join us on Google +
[...] This post was mentioned on Twitter by AshCloudNEWS. AshCloudNEWS said: Natural Catastrophes in 2010 Cost Insurers Billions – Globalsurance (blog) http://goo.gl/fb/9fmP7 [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions …Also on this blogThe Myths About Fitness Exercises9 Ideas To Help You Keep Your Your Fitness Resolutions This YearNatural Weight Loss Fitness Programs Help You Lose Weight – Fast!Fitness Make You Feel GoodHealth & Habits Posted in Uncategorized | Tags: E Books, Eating Habits, ebooks, email, fitness, Fitness Books, Flexibility, Frustration, Good Health, Good Shape, Guest Login, Guilt, Hunger, Instant Access, lose, Losing Weight, Natural, Natural Ways To Lose Weight, Nutrients, Protein, Resistance Exercises, Slow Pace, Sports Fitness, ways, Ways To Lose Weight, weight [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions : International Insurance News [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … [...]
[...] stories in health and medicine this morning, January 4, 2011Discover How Herbalism Can Assist YouNatural Catastrophes in 2010 Cost Insurers Billions …» 8 Types Of Golf Course Jobs For Profession-Bound PeopleHistory and acceptance of Chinese [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … The Chilean earthquake on the 27th of February 2010 reached a magnitude of 8.8 on the Richter scale and was the most costly natural disaster for the insurance industry, with overall losses amounting to US$30 billion (€22 billion) of . [...]
Worst Natural Disasters Usa…
[...] ates value for clients, shareholders and staff. It operates in all lines of insu [...]…
[...] so they can get outstanding deals which in many of cases they can offer on to you.Related BlogsNatural Catastrophes in 2010 Cost Insurers Billions : International Insurance NewsGas & Oil Charge Ahead While Gold Wavers | The Daily Gold Share and Enjoy:Related posts:The [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions : International Insurance News [...]
[...] A new year is upon us! Time to reflect. 2010 was full of challenges for many across the country and the world, with what seemed like a never-ending string of unexpected revelations, strange developments and outright catastrophes – http://www.globalsurance.com/blog/natural-catastrophes-in-2010-cost-insurers-billions-276220.html . [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions : International Insurance News [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … [...]
[...] The factors of genetics are that characteristics are passed on from the biological parents to the child these characteristics include the skin, eye and hair color the height of the child and facial features also sometimes the ability to run fast. Illnesses can also be passed on such as cystic fibrosis, haemophilia, Parkinson’s, Alzheimer’s, luntingdons cohorea. The tendency towards other conditions like asthma, eczema, diabetes, hearing and visual impairments, glucoma, heart disease or a heart murmur can seem to be You may also find this relevant: http://www.globalsurance.com/blog/natural-catastrophes-in-2010-cost-insurers-billions-276220.html [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … [...]
[...] In order to join the European Union, Lithuania agreed to close down its nuclear power plant, Ignalina. The Soviet-era technology is the same as that used at Chernobyl. Ignalina’s first reactor block was shut down in 2004; the second is set to go offline next year. The problem is that it still provides two-thirds of the countrys electricity, and now Lithuania says it wants to keep it running longer. A new, safer reactor could not be completed before 2015. Before that, Lithuanians expect the demand for energy to far exceed supply, so in October they are holding a referendum on Ignalinas future. For more on this read: http://www.globalsurance.com/blog/natural-catastrophes-in-2010-cost-insurers-billions-276220.html [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions : International Insurance News [...]
[...] Natural Catastrophes in 2010 Cost Insurers Billions … [...]
[...] During 2010 insurance company results have been influenced by a number of major catastrophes and nat… [...]
[...] which hit Chile in February and New Zealand in September 2010 were the most notable of the 950 natural catastrophes which occurred last year, making it the worst year on record for insurance payouts; Omega incurred [...]
[...] have been counting the cost of over exposure to natural catastrophes in 2010, with the upshot being the attention to apply better risk management techniques for business being [...]
[...] Global catastrophe costs are trending upwards. According to Swiss Re’s latest sigma study in March, economic losses from both natural and man-made disasters were US$218 billion in 2010, more than triple the total 2009 figure of US$68 billion. These catastrophes cost the global insurance industry over US$43 billion, a 60 percent increase over 2009’s figures, with earthquakes accounting for almost a third of these losses. Swiss Re’s study concludes that the population growth and rising net wealth in seismically active areas results in earthquakes that are both more deadly and costly when they occur, irregardless of any evidence pointing to an increase in earthquake activity. [...]
[...] absorbed an unprecedented US$55 billion in catastrophe claims from the first quarter of 2011, more than they paid out in all of 2010. The exceptional frequency of natural disasters, foremost of which is the March 11 Japanese [...]
[...] Air Transport Association, the total cost of the turmoil on both international airlines, insurers and economies surpassed US$1.7 [...]