Munich Re, the world’s largest reinsurer, said global losses from natural catastrophes were cut in half in 2012, with Hurricane Sandy causing the highest costs.
Natural catastrophes caused $160 billion in losses and $65 billion in global insured losses down from $400 billion and $119 billion respectively in 2011, the Munich-based company said in a statement on its website today. Sandy accounted for about $50 billion in overall losses, with estimates still “subject to considerable uncertainty,” the reinsurer said.
Homeowners and businesses are seeking payouts on policies to help cover losses from Hurricane Sandy, which lashed the densely populated U.S. Northeast coast on Oct. 29, ravaging beach front communities and leaving more than 8 million homes and businesses without power for days. Munich Re said that the drought that hit parts of the U.S. last year caused the second-highest costs, with crop losses of about $20 billion.
“Greater loss-prevention efforts are needed,” Torsten Jeworrek, a Munich Re board member, said in the statement. “It would certainly be possible to protect conurbations like New York better from the effects of storm surges. Such action would make economic sense and insurers could also reflect the reduced exposure in their pricing.”
Munich Re said that the losses related to Sandy are extremely difficult to assess.’’ Without that impact, they “would have been very low” in 2012, it said.