Global catastrophes top US$115 billion, study reveals

On a worldwide scale, catastrophes both man-made and natural resulted in losses of more than US$115 billion, costing insurers more than US$32 billion, in 2001, says a study from Swiss Re. The US$115 billion figure is three times that of the average yearly losses experienced in the 1990s. The largest of these events was, of course, the terrorist attacks on the World Trade Center (WTC) and Pentagon on September 11.In total, more than 33,000 lives were lost in large loss events, including the Gujarat, India earthquake which claimed the lives of 15,000 people, and the WTC attacks which killed almost 3,300.Swiss Re estimates the WTC attacks cost US$90 billion total, with US$19 billion insured losses, taking only property and business interruption losses into account. They study notes that estimates for WTC losses including all lines and life insurance range from US$30-77 billion. Man-made losses were the key to 2001’s escalating loss figure, the study notes. Of the US$32 billion in property losses suffered, more than US$23 billion were from man-made incidents. “For the first time since the 1990s, when natural catastrophes dominated the global loss picture, in 2001 man-made insured losses comprised the lion’s share with 70%.”Other large loss events include Tropical Storm Allison, which cost insurers US$2.5 billion, storms that rocked the U.S. in June, costing insurers US$1.9 billion, an explosion at a fertilizer plant in Toulouse, France that cost the industry US$600 million and Typhoon Nari in Taiwan, which resulted in US$500 million in insured losses. “The trend towards higher losses continues given the risk factors of higher population densities, and higher concentrations of insured values, especially in endangered areas,” the study notes. “Following the large losses incurred in 2001, the risk of terrorism must increasingly be factored into the equation.”