Cat insured losses at USD49bn: Swiss Re

Total economic losses from natural catastrophes and man-made disasters in 2016 are estimated to be USD158 billion in 2016, according to figures released by Swiss Re. This is significantly higher than the USD94 billion losses in 2015, caused by large natural catastrophes, such as earthquakes and floods, according to preliminary sigma estimates.

Insured losses were estimated to be USD49 billion, compared to USD37 billion in the previous year.

The gap between total losses and insured losses in 2016 shows that many events took place in areas where insurance coverage was low, the insurer noted.

Natural catastrophes accounted for USD150 billion of the total economic losses in 2016. Insured losses from natural catastrophe events totalled USD42 billion in 2016, up from USD28 billion in 2015, but slightly below the annual average of the previous 10 years (USD46 billion). Man-made disasters triggered an additional USD7 billion in insurance claims in 2016.

There were a number of major earthquakes across the world in 2016, for example in Taiwan, Japan, Ecuador, Italy and New Zealand.

“Society is underinsured against earthquake risk,” Swiss Re chief economist Kurt Karl said. “And the protection gap is a global concern. For example, Italy is the eighth largest economy in the world, yet only 1 percent of homes in Italy are insured against earthquake risk. Most of the reconstruction cost burden of this year’s quakes there will fall on households and society at large.”