New Swiss Re sigma study: 2008 one of the worst years for catastrophe losses
17 March 2009, Zurich
2008 was one of the worst years for catastrophe losses. More than 240 500 people lost their lives. Insurers across the sector paid out USD 52.5bn to compensate for property claims, and the total impact on the economy caused by natural and man-made catastrophes around the world added up to USD 269bn.
2008 was exceptional in terms of fatalities and losses. Statistics confirm a trend towards an increase in the number and costs of natural catastrophes and man-made disasters.
According to Swiss Re’s latest sigma study, “Natural catastrophes and man-made disasters in 2008”, 137 natural catastrophes and 174 man-made disasters occurred in 2008. Asia suffered the most in terms of the number of lives lost, while the US was worst hit in regard to insured property losses. Europe was less impacted with only minor losses compared to last year.
Natural catastrophes cost property insurers more than USD 44.7bn …
High catastrophe claims in the US were driven by Hurricanes Ike and Gustav as well as thunderstorms during the first half of 2008. Europe’s losses, down from last year, represented slightly more than a tenth of the world total in 2008, largely due to lower storm and flood damages. In early 2008, China suffered losses amounting to more than USD 1.3bn, driven by an unusually cold winter with record amounts of ice and snow.
... and more than USD 7.8bn for man-made catastrophes.
Major man-made disasters caused losses of USD 7.8bn in 2008, with large-scale industrial fires, explosions and losses in the energy sector at the top of the list. Man-made catastrophes resulted in 5 600 deaths in 2008; shipping and boating accidents as well as bombings and social unrest caused the most casualties.
Losses in Asia extremely high, likely to spur need for insurance.
In 2008, the total damages to the economy amounted to USD 269bn worldwide. Almost half this amount can be attributed to the earthquake that struck China in May, which caused costs to the economy of USD 124bn. This corresponds to approximately 3% of China’s GDP.
Many governments in Asia face significant financial risks when catastrophes occur. Given the rapid development of income and wealth in Asia, the financial exposures will swiftly rise. This is likely to increase the focus on prevention and ex-post disaster management. It will also give rise to the development of insurance as a tool to cope with the financial consequences of catastrophes. It is expected therefore, that in Asia, insurance will play a more important role in the future than it does today.
Nevertheless, such development needs time. Given the high percentage of people with low incomes in this part of the world, public private partnerships are critical to the development of effective and accessible insurance solutions. Global and regional insurers and reinsurers also play an essential part in the further establishment of insurance in Asia, on the one hand by sharing their knowledge and expertise, and on the other by helping to absorb the rising risks in these markets.
Notes to editors
Swiss Reinsurance Company Ltd
Swiss Re is a leading and highly diversified global reinsurer. The company operates through offices in more than 25 countries. Founded in Zurich, Switzerland, in 1863, Swiss Re offers financial services products that enable risk-taking essential to enterprise and progress. The company’s traditional reinsurance products and related services for property and casualty, as well as the life and health business are complemented by insurance-based corporate finance solutions and supplementary services for comprehensive risk management. Swiss Re is rated “A+“ by Standard & Poor’s, “A1” by Moody’s and “A” by A.M. Best.
How to order this sigma study:
The English, German, French, Italian and Spanish versions of the sigma study No 2/2009, "Natural catastrophes and man-made disasters in 2008: North America and Asia suffer heavy losses" are available electronically on our sigma section. The versions in Chinese and Japanese will appear in the near future.
Printed editions of sigma No 2/2009 in English, French, German, Italian and Spanish are also now available. The printed versions in Chinese and Japanese will be available shortly.
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