U.S. Disasters Account for Majority of Global Catastrophe Losses
More natural peril events occurred in 2012, but the losses incurred were far below the record-highs established in 2011.
Insurance Networking News, January 24, 2013
Two U.S. natural peril events, Hurricane Sandy and a year-long drought, accounted for two-thirds of all 2012 insurance losses globally and nearly half of all economic losses for the year.
Aon Benfield’s first Annual Global Climate and Catastrophe Report also reveals that 295 natural peril events occurred worldwide in 2012 (compared to 257 in 2011) causing total economic losses of $200 billion, only slightly above the 10-year average of $187 billion.
While economic losses were close to average, insured losses in 2012 were 36 percent higher than the ten-year average ($72 billion vs. $53 billion) because the two most costly events of the year occurred in the United States, which has higher than average insurance penetration. 2012 insured losses were significantly lower than the record 2011 insured loss of $133 billion.
The new Annual Global Climate and Catastrophe Report is accompanied by the announcement of a new website, Catastrophe Insight, which provides 10 years of catastrophe data, including economic and insured losses across nine key natural perils. The projects come from Impact Forecasting, the name of the catastrophe model development unit at Aon Benfield. The new website was created to provide dynamic results from the report, which includes charting functions and annual top 10 catastrophe loss tables from 2005-2012.
"Despite growing support for 'the new normal' theory of a world dominated by rapidly escalating global catastrophe losses, our study highlights that 2012 returned to a more normal level of losses after the extreme economic and insured losses of 2011,” said Stephen Mildenhall, CEO of Aon Benfield Analytics. “While nominal catastrophe losses are increasing at an alarming rate, economic losses as a percent of global GDP—a measure appropriately normalized for inflation and economic development—has remained relatively stable over the past 30 years. The moderate level of catastrophe losses for 2012 is reflected in strong growth in reinsurer capital during the year."
Hurricane Sandy was the costliest single event of the year, to date causing an estimated $28.2 billion in insured losses across private insurers and government-sponsored programs, and approximately $65 billion in economic losses across the United States, the Caribbean, the Bahamas, and Canada.
In 2012, Europe, Asia and North America (outside the U.S.) all sustained aggregate insured losses above $1 billion due to flooding, earthquakes and tropical cyclones. Losses in Asia and Oceania were well below their recent 10-year averages, and Europe was slightly below its average.
Records show that 2012 ended as the eighth warmest year in world history since global land and ocean temperature records began in 1880.
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