Insurers' First-Half Disaster Costs Double to $22 Billion, Munich Re Says
Insurers’ losses from natural catastrophes, including the February earthquake in Chile, totaled $22 billion in the first half of the year, more than double the average for the period since 2000, Munich Re said.
Insured losses surpassed the first-half record from 2008 and compare with $11 billion reported for the same period last year, the Munich-based company said in an e-mailed statement today. Total economic losses from natural catastrophes amounted to $70 billion in the first six months of 2010, the world’s largest reinsurer said.
“Following a relatively benign 2009, the first six months of this year were marked by three natural catastrophes ranked as great,” said Peter Hoeppe, who heads Munich Re’s Geo Risks Research Department. The disasters were earthquakes in Chile and Haiti and storms in Europe.
The Chile earthquake, the world’s fifth-strongest in a century, resulted in insured losses of about $8 billion, according to Munich Re. European reinsurers such as Munich Re and Swiss Reinsurance Co. have disclosed the highest claims from the quake.
“The Haiti and Chile earthquakes in particular rank among the most devastating events ever recorded, based on a number of parameters,” according to today’s statement.
European winter storm Xynthia, which swept across Portugal, Spain, France and Germany in February, is expected to cost insurers $3.4 billion, Munich Re said.
The insurance industry, which lost more than 16 percent of its surplus in the financial collapse through the end of March 2009, has regained the funds as asset values recovered, Insurance Information Institute President Bob Hartwig said in a conference call hosted by Munich Re. Some of the funds may be needed for hurricane claims this year, he said.
The 2010 Atlantic storm season may be the most active since 2005, which was the worst on record with $115 billion in damage, Moody’s Investors Service said last month. The season began in June and ends in November.
Losses from natural catastrophes caused by climate change will rise, Hoeppe said in the call. Eight of the 12 most expensive disasters in U.S. history have occurred since 2004, Munich Re said. Weather-related catastrophes have increased at a faster rate than geophysical events, he said.
“Global warming has already and will in the future contribute to the increase in the probability of these events,” he said.
Catastrophes outside the U.S. this year cost insurers more than twice as much as domestic disasters, Munich Re data show, which is “quite atypical,” Hoeppe said. Disasters in the first half of the year in the U.S. accounted for 28 percent of global insured losses, compared with a 60 percent average since 1980, Munich Re said.