Swiss Re’s sigma on natural catastrophes and man-made disasters in 2011 unveils USD 116 billion in insured losses and record economic losses of USD 370 billion

28 March 2012, Zurich

  • Last year saw the highest economic losses in history, at USD 370 billion
  • The insurance industry weathered 2011 soundly despite experiencing the second-largest insured losses ever, at USD 116 billion
  • 2011 also brought the highest insured earthquake losses, at USD 49 billion
  • Flooding in Thailand resulted in the highest insured losses ever for a single flood event, at USD 12 billion

Swiss Re’s latest sigma study reveals unprecedented economic losses of USD 370 billion from natural catastrophes and man-made disasters in 2011. Despite immense insured losses of USD 116 billion (a 142% increase over the previous year) arising from record earthquake and flood losses, the insurance industry weathered the year well and played a key role in risk management and post-disaster recovery financing.

Highest ever recorded economic losses

In 2011, total economic losses to society due to disasters (both insured and uninsured) reached an estimated USD 370 billion, compared to USD 226 billion in 2010. The earthquake in Japan, the largest known in terms of magnitude to have ever hit the country, accounted for 57% of 2011’s economic losses. Altogether, natural catastrophe insured losses came to around USD 110 billion, while losses from man-made disasters were around USD 6 billion, making 2011 the second-highest catastrophe loss year ever for the insurance industry.

Kurt Karl, Swiss Re’s Chief Economist, says: “Last year saw extraordinary and devastating catastrophic events. The earthquakes in Japan, New Zealand, and Turkey, as well as the floods in Australia and Thailand, were unprecedented and brought not only massive destruction but also the loss of thousands of people’s lives. Yet two-thirds of the staggering USD 370 billion in economic damage will be shouldered by corporations, governments, relief organisations, and ultimately individuals, pointing to the still widespread lack of insurance protection worldwide.”

Record-breaking earthquake insured claims

Due to the extreme magnitude of the event (Mw 9.0), the 2011 Japan earthquake cost the insurance industry an estimated USD 35 billion, making it the most expensive earthquake on record. “Because Japan‘s earthquake insurance protection is very low, particularly for commercial properties, the insurance industry will bear only 17% of the total losses. Had Japan been more fully insured, 2011 would certainly have been the most expensive year ever also in terms of insured losses,” says Lucia Bevere, Swiss Re Senior Catastrophe Data Analyst and co-author of the study. In New Zealand, where earthquake insurance penetration is high, particularly for residential properties, the February earthquake (Mw 6.3) – the third most expensive in history – triggered further insurance claims of USD 12 billion, covering 80% of economic losses.

Unprecedentedly high flood losses

The floods in Australia, the country’s worst natural disaster ever in terms of losses, triggered insured claims of over USD 2 billion. However, at USD 12 billion, insured claims from the flood in Thailand are the highest ever recorded for a river water flood event. “Flood losses can be just as tremendous as earthquake and storm losses. The flooding in Thailand is a painful reminder that, given the high risk of flooding in many countries, other parts of the globe could be prone to similar or even bigger losses,” says Jens Mehlhorn, Head of Flood Perils at Swiss Re and co-author of the study.

Mild hurricane season caps high US insured losses

In addition to earthquakes and floods, an unparalleled tornado season in the US caused insured catastrophe losses of over USD 25 billion. “Despite the exceptional tornadoes and Hurricane Irene, a relatively moderate hurricane season kept overall insured losses in the US lower than the record year of 2005, the year in which hurricanes Katrina, Wilma and Rita contributed the lion’s share of that year's total global claims of USD 123 billion,” adds Bevere.

The insurance industry weathered the events well

The insurance industry proved highly effective in weathering the extreme events of 2011. Despite historic losses and a challenging financial environment, the industry played a key role in post-disaster recovery financing, bringing much-needed funds to affected populations, businesses, and governments. The events, however, revealed increasing risk accumulation, particularly in emerging markets. “To support the industry going forward, Swiss Re will enhance its CatNet® information system by including more detailed river flood hazard zones. The update, to be released in spring 2012, will enable underwriters and risk managers to more accurately assess flood risks on a global level,” adds Mehlhorn.


Notes to editors:

Definitions and selection criteria for sigma catastrophe statistics:
Natural catastrophes Loss events triggered by natural forces
Man-made disasters Loss events associated with human activities
Insured catastrophe losses Losses caused by the catastrophes covered by property insurance
Total economic losses Also include the uninsured part of the property losses related to the catastrophes
Minimum selection criteria:
Total losses USD 89.2m
Or: Insured property claims Shipping: USD 18.0m
Aviation: USD 35.9m
Other: USD 44.6m
Or: Casualties Dead or missing: 20
Injured: 50
Homeless: 2 000


Swiss Re
The Swiss Re Group is a leading wholesale provider of reinsurance, insurance and other insurance-based forms of risk transfer. Dealing direct and working through brokers, its global client base consists of insurance companies, mid-to-large-sized corporations and public sector clients. From standard products to tailor-made coverage across all lines of business, Swiss Re deploys its capital strength, expertise and innovation power to enable the risk taking upon which enterprise and progress in society depend. Founded in Zurich, Switzerland, in 1863, Swiss Re serves clients through a network of 56 offices globally and is rated "AA-" by Standard & Poor's, "A1" by Moody's and "A+" by A.M. Best. Registered shares in the Swiss Re Group holding company, Swiss Re Ltd, are listed on the SIX Swiss Exchange and trade under the symbol SREN. For more information about Swiss Re Group, please visit:

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