Tsunami losses likely to be US$2.5-$4 billion: Guy Carpenter

In a report on the December 26, 2004 Indian Ocean tsunami, reinsurance broker Guy Carpenter & Co. Inc. says insured losses from the disaster should reach US$2.5-$4 billion, plus US$1 billion in life & health losses.In “Tsunami: Indian Ocean Event and Investigation into Potential Global risks”, Guy Carpenter says reinsurance losses related to the event, one of the worst ever in terms of human losses, would be small.However, tsunamis are a widespread phenomenon, with 828, or about eight per year, recorded in the Pacific Ocean since 1900 – more than 200% more than are seen in all other oceans combined. The high incidence of tsunamis raises questions about preparedness levels, the report notes. “Although the 2004 tsunami drew worldwide attention because of the massive devastation left in its wake, tsunamis are far more common than people think. As population density continues to increase in many of the world’s coastal areas, our understanding of the peril may help prepare better warning systems, limit loss of life and mitigate property damage,” says Ryan Ogaard, global practice leader of Guy Carpenter’s Instrat unit.However, the report also notes, even with plans in the works to extend tsunami warning systems to regions not currently covered, “an effective network cannot prevent property destruction or limit insured losses in vulnerable areas”.