Natural Catastrophes and Man Made Disasters

Mar
2010

A reprieve from global catastrophes? - So far, the 21^st century has been characterized by massive catastrophic events:

9/11 in 2001
Indian Ocean tsunami in December 2004 (+230,000 dead)
Hurricane Katrina hitting New Orleans – August 2005
Sichuan, China earthquake with 88,000 dead – May 2008
Haiti earthquake killing 223,000 – January 2010

Against that backdrop, 2009 was a relatively quiet year. But even so, according to definitions used in the insurance industry, 288 catastrophic (or “cat”) losses occurred around the world.

Events are considered to be “cats” based on the amount of damage or number of fatalities, using different metrics depending on the type of disaster (i.e. windstorm, maritime, aviation, etc.). Of these events last year, 133 were natural disasters (earthquakes, hurricanes, flooding, other storms.)

The total global economic loss was US$62B of which of US$26B was insured. (Context: the heaviest year on record was 2005, when US$117B was paid for insured losses.)

Canada was spared any “cats” in 2009. But the US sustained more insured damage than anywhere else in the world, almost 50% of the global insured “cat” total.

At the same time, North America sustained very few fatalities.

By contrast, Asia sustained 125 “cat” events and incurred 9400 of the 15,000 global fatalities. But the continent was heavily uninsured – at least in the areas suffering the damage – and therefore, had only 9% of the world’s insured “cat” losses.

Since 1970, the graph has been trending upwards for both insured and non-insured catastrophic losses. And the global insurance marketplace is so heavily interwoven, that losses anywhere affect premiums everywhere.

Source: Swiss Re: Natural Catastrophes and Man-Made Disasters in 2009