Insurers to pick up half of economic losses bill
The reinsurance industry will cover around half of the costs of all natural catastrophes and man-made disasters globally in 2012, according to a report by Swiss Re. According to the sigma report preliminary estimates, total economic losses will reach $140 billion in 2012 while total insured losses will reach approximately $65 billion.
The world’s second biggest reinsurer said that this will contribute greatly to post-disaster relief and the contribution of the insurance industry should be recognised. But it also noted that while some parts of the world, such as the US, are well insured, many other countries remain under-insured and thus unable to benefit from such financial contributions.
“Severe weather events continue to affect many parts of the world. Although insurance cannot bring back lost lives, many people and businesses can rely on financial relief from insurance cover, as is the case for the US,” said Kurt Karl, Swiss Re’s chief economist. “However, in large parts of the globe that are prone to severe weather events, people and businesses could increase risk-preparedness by eliminating under-insurance.”
Natural catastrophes alone led to over 11,000 being lost and roughly $60 billion in insured claims, the report said. After a benign first half of the year, Hurricane Sandy and drought in the US in the second half of 2012 bumped up the figures for both economic and insured losses substantially.
The tally is moderate compared to 2011, however, which saw historic insured losses of over $120 billion due to record earthquakes and flooding.
