Natural disasters may cost insurers as much as $US110 billion worldwide in 2010, five times more than last year when the U.S. escaped hurricane damage, Swiss Reinsurance Co. said.
"We have already seen significant events in 2010," Thomas Hess, chief economist of Zurich-based Swiss Re, said today in a statement. "The industry is therefore well-advised to prepare for much higher losses."
In the first two months of 2010, an earthquake hit Chile and European Windstorm Xynthia struck France. Insured losses from the 8.8-magnitude quake in Chile on Feb. 27 may be as much as $8 billion, catastrophe modeler Eqecat Inc. said on March 1. Xynthia, which killed at least 47 people, may cost insurers as much as 2 billion euros ($US2.75 billion), according to Risk Management Solutions.
Costs to insurers from natural disasters totaled a below- average $US22 billion in 2009, Swiss Re said. Only two tropical storms hit the US last year, compared with 2008 when Hurricanes Ike and Gustav contributed to more than $US44 billion in insured losses from natural disasters.
"The year is off to a very bad start from a loss perspective for the industry," Michael Paisan of Stifel Nicolaus & Co. said yesterday in an e-mail. "The wind will blow during hurricane season, so there will be more losses."
The most expensive of the 133 natural catastrophes occurring in 2009 was European storm Klaus, which cost 2.35 billion euros, Swiss Re said. The reinsurer said "secondary perils" including floods, hail, tornadoes and drought caused more than half of the insured losses last year.
Haiti
The earthquake that struck Haiti on Jan. 12 killed as many as 300,000 people, demolished homes and leveled commercial buildings. Insured losses will be a fraction of the total. Haiti has less than $US20 million in non-life premium income, Risk Management Solutions said, citing Axco Insurance Information Services. Rebuilding the poorest country in the western hemisphere may cost as much as $US13.9 billion, according to the Inter-American Development Bank.
Munich Re, the world's largest reinsurer, has said losses from natural catastrophes caused by climate change will rise.
"The trend towards an increase in weather-related catastrophes continues," Peter Hoppe, head of Munich Re's Geo Risks Research, said in a Dec. 29 statement.
