Catastrophes 1999
No. 2/2000
Natural catastrophes and man-made disasters in 1999: Storms and earthquakes make 1999 the second most expensive year in insurance history
In 1999 natural catastrophes and man-made disasters claimed more than 105 000 lives across the globe, according to the latest sigma study. Total losses are estimated at around USD 100 billion, although the figure does not take indirect economic losses into account. Catastrophe losses in 1999 cost the global insurance industry USD 28.6 billion*, representing the second-highest losses ever for insurers.
*All sigma losses are quoted at 1999 prices; sigma records natural catastrophes causing insured losses of at least USD 33 million.
Tragic human cost, high total losses
The catastrophes included in the sigma statistics for 1999 account for over 105 000 fatalities, with natural catastrophes being responsible for more than 90% of victims. The landslides in Venezuela alone caused around 50 000 fatalities, the Izmit (Turkey) earthquake 20 000 and the tropical cyclone in Orissa (India) 15 000. Total damages amounted to approximately USD 100 billion the second-highest sum recorded in sigma since 1995, the year of the Kobe earthquake.
Due to its devastating storms and earthquakes 1999 proved to have far-reaching effects on insurers and reinsurers as well. With a loss burden in excess of USD 28.6 billion, 1999 was, according to sigma statistics, the second most expensive year ever for reinsurers after 1992, the year of Hurricane Andrew. The trend towards high losses that had become apparent since 1989 thus continued unabated.
Seven billion-dollar insured losses arising from natural catastrophes
More than half of the high loss burden is due to seven billion-dollar natural catastrophes loss events: December's Storm Lothar caused insured losses of USD 4.5 billion, while Storm Martin accounted for USD 2.2 billion losses. Despite the high loss burden, the damage cannot be seen as a hundred-year event, since storm damage similar to that caused by Lothar is to be expected in Europe around every ten years, and damage similar to Martin every two to three years. The other billion-dollar loss events comprised Typhoon Bart in Japan, Hurricane Floyd in the US, the Bahamas and Caribbean, the earthquake in Izmit, the series of more than 70 tornadoes that hit the Mid-West of the US, the earthquake in Taiwan and the hailstorm in Sydney, the latter falling just short of the billion-dollar mark. More than half of the man-made disasters, which totalled over USD 4 billion of insured losses, were attributable to industrial fires and explosions. In the US, explosions at a power plant (USD 650 million), an aluminium plant (USD 275 million) and an oil refinery (USD 247 million) were particularly expensive. Space and aviation insurers also had to contend with claims of USD 760 million and USD 600 million, respectively.
Earthquakes: random accumulation in 1999; more exact seismic hazard assessment thanks to new research results
The study places the accumulation of serious earthquakes in 1999 in a global context: on the whole, seismic activity did not exceed its long-term average; what was unusual was the number of quakes that struck densely populated areas. Although it is not yet possible to predict earthquakes, new seismological research can at least provide us with a more precise assessment of the vulnerability of a region to an earthquake; for example, research carried out into stress transfer along the North Anatolian Fault shows that the Izmit and Düzce earthquakes of 1999 did not occur independently of each other. The measurement of the stress situation triggered by an earthquake enables us to compile a more accurate calculation of a region's vulnerability to an earthquake than was possible in the past. Insurers can duly reflect such knowledge in their rate calculations so that risk-adequate premiums will continue to ensure a proper spread of risk in earthquake insurance coverage.
Detailed tables
The sigma study also contains detailed lists of all the losses recorded in 1999 as well as tables on the most costly insurance losses and on the worst catastrophes in terms of fatalities observed in the 30 years that sigma has been recording these events.
This publication can be downloaded in English, German, Spanish, Italian and French.
Download "Natural catastrophes and man-made disasters in 1999: Storms and earthquakes make 1999 the second most expensive year in insurance history"
Download "Natur und Man made Katastrophen 1999: Stürme und Erdbeben führen zu zweithöchster Schadenlast der Versicherungsgeschichte"
Download "Catástrofes de la naturaleza y catástrofes antropógenas en 1999: Tempestades y terremotos causan la segunda mayor siniestralidad de la historia del seguro"
Download "Catastrofi naturali e man made nel 1999: tempeste e terremoti sono all'origine del secondo onere sinistri per gravità nella storia delle assicurazioni"
Download "Catastrophes naturelles et techniques en 1999: tempêtes et tremblements de terre ont été à l'origine de la deuxième année la plus onéreuse de l'histoire de l'assurance"
For further questions and copies of Chinese or Japanese versions, please contact sigma@swissre.com.
