2010 – A Record-setting year for Catastrophes?

So far, 2010 has seen an exceptionally large number of global natural catastrophes taking lives and damaging vital infrastructure.  And for most of us, this news is so common, we’ve largely forgotten the dimensions of each tragedy.

According to industry definition, the first half of 2010 saw 440 catastrophic events around the globe.  Losses of US$70 billion were recorded – US$22 billion of which were insured – exceeding the amount for the whole of 2009.  This figure also surpasses the first-half average of the last 10 years.

The significant events:

• January 12 – Haiti earthquake killing an astonishing 223,000 people (one of the highest death tolls in recorded history).  Direct damage is massive, particularly when contrasted with the country’s economic strength, but a relatively small US$150 million was insured.
• February 27 – Chile’s earthquake had a greater magnitude (8.8 compared to 7 in Haiti) and was the fifth largest earthquake measured.    The fatality count was reduced from initial reports, concluding 521 deaths resulted directly from the 90 second event.  The quake resulted in tsunami warnings being issued in 53 countries and power interruptions to 93% of Chile’s population; some were affected for several days.  Overall losses were US$30 billion, US$8 billion of which is insured.
• April 13 – magnitude 7 earthquake in south-central China killed more than 2200.

The costliest weather-related incident was winter storm Xynthia hitting central Europe in late February, racking up damages of US$4.5 billion.  And don’t forget the eruption of Iceland’s volcano Eyjafjallajokull in March – no known fatalities, but significant economic damage particularly due to thousands of flight cancellations.  This year is also projected to be the worst year for global flooding ever.  At this writing, the BP Gulf of Mexico oil leak appears to have been finally contained after almost 3 months of unprecedented environmental damage.

Through a complex web of inter-party insurance agreements, the financial impact of these losses gets distributed around the world.  The mechanism of reinsurance means we all pay a small part.

Anecdotally, it seems these tragic events are happening with greater frequency.  Each affects us at least indirectly – the next one might be closer to home.

*source: Munich Re Geo Risks Research

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