Catastrophe losses in 2000
No. 2/2001
Natural catastrophes and man-made disasters in 2000: fewer insured losses despite huge floods
In 2000, catastrophes claimed more than 17'400 lives and caused overall financial losses - not counting indirect economic damage - of almost USD 50 billion. According to Swiss Re's definitive statistics, the burden on the insurance industry was comparatively low at USD 10.6 billion.
Only one loss approaching USD 1 billion
Catastrophe losses cost the insurance industry USD 10.6 billion in 2000, compared with USD 32.9 billion in 1999*. Only one event, the Tokai floods in Japan, almost reached the billion-dollar mark, which according to the latest sigma study from Swiss Re explains the sharp contrast with 1999, when nine storms and earthquakes each caused losses in excess of one billion US dollars. However, the accumulation of storms and earthquakes in areas with high concentrations of values in 1999 and their absence in 2000 were purely random; severe earthquakes have already occurred in January and February 2001, this time in El Salvador and India. Given that risk factors still exist such as increasing population densities, the expected effects of climate change, and higher concentrations of values particularly in zones exposed to natural hazards, the trend towards higher losses is expected to continue.
*All losses are calculated at 2000 prices. sigma includes losses from natural catastrophes which surpass USD 34 million.
Loss potential caused by floods underestimated
Of the USD 10.6 billion, USD 3.0 billion was due to man-made disasters and USD 7.5 billion to natural catastrophes. Floods accounted for a high proportion of natural catastrophe losses (USD 2.5 billion), making 2000 one of the most expensive years for floods in insurance history, along with 1993, when Mississippi floods caused huge losses to the insurance industry. As a result, the most expensive insurance losses in 2000 were the result of floods: the Tokai floods in Japan (USD 990 million) and flooding in the UK in the wake of Storm Oratia (USD 747 million) - an indication of the often underestimated loss potential of floods.
Costly man-made losses, high overall losses
With insured losses of USD 3.0 billion, technical disasters remained significantly below the average seen in the 1990s. Major fires and explosions accounted for USD 1.3 billion of the total, aerospace losses for USD 1.0 billion and aviation losses for USD 397 million. The overall financial loss due to catastrophes - not counting indirect economic damage - totalled almost USD 50 billion, three-quarters of which was accounted for by nine events, each causing economic damage in excess of USD 1 billion. Eight of these major losses were caused by natural catastrophes, while the other was the consequence of the "I love you" computer virus, which replicated via e-mail to paralyse computer networks worldwide within the space of one day. In the 351 events recorded by sigma, more than 17'400 people lost their lives; the floods in India and Bangladesh in August and September alone accounted for at least 1'200 fatalities, while the death toll from those in southern Africa was 920. The 9'600 victims of man-made catastrophes were clearly above the average for the past decade; two-thirds of these victims resulted from transport disasters on land, at sea and in the air - a sign of increasing mobility worldwide.
Premiums for catastrophe reinsurance recovering but still not covering costs
The CAMARES analysis of 13 important reinsurance markets in sigma showed that the sustained collapse in catastrophe reinsurance prices seen since 1994 came to an end in 2000. It was only during the renewals for 2001, however, that a general rise became apparent. The 16% rise in the markets examined therefore signals a trend reversal, though one which only makes up for the losses suffered in 1998/99. According to the study, further price rises are necessary if catastrophe reinsurers are to cover their costs in the long term.
Graphs and detailed tables
The latest sigma study contains graphs and summaries of the losses recorded. It also tabulates the worst events of 2000 and the period 1970-2000.
This publication can be downloaded in English, German, Spanish, French and Italian.
Download "Natural catastrophes and man made disasters in 2000: fewer insured losses despite huge floods"
Download "Natur- und Man made Katastrophen 2000: Trotz riesiger Fluten weniger Versicherungsschäden"
Download "Catástrofes de la naturaleza y catástrofes antropógenas en el 2000: menos daños asegurados a pesar de las devastadoras inundaciones"
Download "Catastrophes naturelles et techniques en 2000: malgré des inondations dévastatrices, le nombre de domage assurés a diminué"
Download "Catastrofi naturali e disastri man made nel 2000: meno sinistri assicurati nonostante le gravi alluvioni"
For further questions and copies of Chinese or Japanese versions, please contact sigma@swissre.com.
