The record Chilean earthquake and winter storm Xynthia in Europe led catastrophes that caused insurance industry costs from natural disasters to surge 90 percent this year, according to Aon Corp.
Insured losses from natural disasters climbed to $38 billion from $20 billion a year earlier, according to a report today from Aon Benfield, a unit of the world’s largest insurance broker. Economic losses, which included uninsured costs of an earthquake in Haiti and flooding in Pakistan, totaled $252 billion, a fourfold increase from last year.
“Nature was very active in 2010,” Chicago-based Aon said in the report. “Major earthquakes in Haiti, Chile and Indonesia caused thousands of fatalities and widespread damage. Vast floods persisted for many months across portions of Asia. Severe weather outbreaks in the United States and Australia spawned tornadoes, damaging winds and destructive hail.”
The reinsurance industry, led by Munich Re, Swiss Reinsurance Co. and Warren Buffett’s Berkshire Hathaway Inc., provided “ample” protection for the Chile quake that cost insurers $8.5 billion, the year’s most expensive disaster for the industry, Aon Benfield Analytics Chief Executive Officer Stephen Mildenhall, said in a statement. Reinsurer capital is at a record level, and supply of the funds to backstop insurers may outstrip demand, lowering rates next year, he said.
February’s winter storm Xynthia, which struck France, Portugal, Spain, Belgium and Germany, was the second-most expensive natural disaster for insurers, costing $3.65 billion, Aon said.
New Zealand, Haiti
Industry losses from the New Zealand earthquake in September were $3.05 billion, the third-most expensive disaster of the year, according to the report. PartnerRe Ltd. said this week that industry losses from the quake could climb to $5.5 billion on the higher-than-expected number of claims.
The January earthquake in Haiti was the most destructive event this year, claiming about 230,000 lives and damaging or destroying 350,000 structures, Aon said. About 1 percent of the $8 billion in economic losses were insured.
Flooding in Pakistan in July and August damaged or destroyed 1.7 million buildings, killed about 2,000 people, and caused an estimated $30 billion in economic losses, Aon said.
The U.S. sustained $2 billion in insured losses from storms in the Great Plains and another $1.5 billion from flooding in the Nashville, Tennessee, area in April and May, Aon said. The U.S. escaped major storm damage in an Atlantic season that produced the second-most number of hurricanes in the last 25 years.