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Disasters caused $37.4bn in losses - insurer

Aug 12 2015 15:16

Zurich - Natural and manmade disasters caused $37.4bn in economic losses during the first half of 2015, proving far less costly than in recent years, reinsurance group Swiss Re said on Tuesday.

The figure, which combines both insured and uninsured losses, marked a 37% drop from the first half of 2014.

It was also only about a third of the average first-half loss over the previous decade of $107bn.

The insurance industry took a hit of $16.5bn, or 45%, of those losses.

That marked an increase over the previous 10-year average cover of 27%, Swiss Re, the world's second largest reinsurance group, said in a statement.

Natural disasters like the devastating Nepal earthquakes in April and May accounted for a full $33bn of the losses - well below the $54bn price tag they carried during the first six months of 2014.

But while the economic cost of disasters dwindled, the human cost soared.

During the first six months of 2015, some 18 000 people died in disasters - half of them in the Nepal earthquakes alone.

Sweltering heat waves in India and Pakistan in May and June meanwhile claimed around 5 000 lives in total, Swiss Re said.

The large numbers of refugees and migrants attempting the perilous journey across the Mediterranean to Europe have also swelled the number of disaster victims during the first half of the year.

The UN refugee agency said last week that since the beginning of the year, more than 224 000 migrants have crossed the sea to Europe, often on rickety boats and at the mercy of human traffickers.

Over 2 100 have died en route.

But the deadliest disasters are not always the priciest for insurers, who traditionally take the largest hits in rich countries, given their wealthier economies and extensive insurance penetration.

The costliest disasters for the insurance sector during the January to June period thus stemmed from severe winter weather and thunderstorms in the United States and Europe.

A single winter storm on the east coast of the United States in February left insurers with $1.8bn in losses, marking the highest loss of any event so far this year.

Poorer nations meanwhile generally face a gap between overall economic damage and insurance payouts.

This was the case in Nepal, where the earthquakes are estimated to have caused more than $5.0bn in losses, but only $160m of that was passed on to insurers.

"The tragic events in Nepal are a reminder of the utility of insurance," Swiss Re chief economist Kurt Karl said in the statement.

"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," he added.

disasters  |  financial services  |  insurance
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