Losses from natural catastrophes and disaster spike in 2016
Global 2016 losses from disasters, both economic and insured, were the highest since 2012 and reversed the downtrend of the last four years, according to a new Swiss Re Sigma report.
The spike was due to a high number of sizable disaster events, including earthquakes, storms, floods and wildfires that caused extensive damage across many regions.
The global economic losses from natural catastrophes and disaster events jumped to $175 billion in 2016, almost twice the $94 billion seen in 2015, according to the report.
Total insured losses were up 42 percent at $54 billion in 2016.
"In 2016, both economic and insured losses were close to their 10-year averages,” said Kurt Karl, chief economist of Swiss Re.
"Insured losses made up about 30 percent of total losses, with some areas faring much better because of higher insurance penetration." Areas with high insurance penetration are better equipped to recover from the shock of a disaster, for example with prompt settlement of their insurance claims.
North America accounted for more than half the global insured losses in 2016. This was largely due to a record number of severe convective storm events in the US, and the level of insurance penetration for such storm risks in the US is high, the report said. The costliest was a hailstorm that struck Texas in April 2016, resulting in economic losses of $3.5 billion, of which $3 billion were insured, so about 86 percent of losses were covered. Many households and businesses were insured, and they were well covered for the heavy damage to property caused by large hailstones.
Globally there were 327 disaster events in 2016, of which 191 were natural catastrophes and 136 were man-made.
In terms of devastation wreaked, there were large-scale disaster events across all regions in 2016, including earthquakes in Japan, Ecuador, Tanzania, Italy and New Zealand. In Canada, a wildfire across the wide expanses of Alberta and Saskatchewan turned out to be the country's biggest insurance loss event ever, and the second costliest wildfire on sigma records globally. There were also a number of severe flood events in 2016, in the US, Europe and Asia, and there was Hurricane Matthew, the first Category 5 storm to form over the North Atlantic since 2007. Matthew caused the largest loss of life – more than 700 people died, mostly in Haiti – of a single event.
Asia was worst hit in terms of the number of disaster events (128) and resulting economic losses (approximately $60 billion). The earthquake on Kyushu Island, Japan in April inflicted the heaviest economic losses, estimated to be between $25 billion and $30 billion. Worldwide, around 11 000 people lost their lives or went missing in disasters in 2016, down from more than 26 000 in 2015.
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