U.S. Share of Global Disaster Cost Doubles on Sandy
The U.S. share of insurance losses from worldwide catastrophes more than doubled in 2012 as superstorm Sandy lashed the Northeast and the nation suffered its worst drought since the 1930s.
The U.S. accounted for about 90 percent, or $65 billion, of $72 billion in global losses, according to the Impact Forecasting unit of Aon Plc (AON), the London-based insurance broker. That compares with 40 percent in 2011 when Japan had higher- than-usual costs because of an earthquake and tsunami.
The location and climate of the U.S. make the country more vulnerable than most developed nations to hurricanes, tornadoes, wildfires and drought. U.S. commercial buildings and homes are more likely to have coverage than property in less wealthy nations facing storm risk, like Nicaragua and Haiti.
“The United States has typically been the main driver of global loss,” Steve Bowen, senior scientist and meteorologist at Impact Forecasting, said in a phone interview today after his firm released a statement on 2012 losses. The U.S. typically accounts for about 64 percent of global insured losses, he said in an e-mail.
The last time the U.S. incurred more than 90 percent of losses was 2005 when the country was pummeled by hurricanes including Katrina, Rita and Wilma, he said.
Sandy cost insurers about $28.2 billion, compared with $78.2 billion for Katrina when adjusted to 2012 dollars, Impact said. Crop insurance claims climbed to a record, with farmers collecting more than $11.5 billion for damage in 2012, according to a Risk Management Agency report published on the U.S. Department of Agriculture website.
The KBW Insurance Index of 24 U.S.-listed companies gained 16 percent in the past 12 months, compared with the 20 percent rally in the 75-company Bloomberg World Insurance Index. (BWINSU)
To contact the editor responsible for this story: Dan Kraut at email@example.com