Disasters cost world economy $350 billion

Disasters cost world economy $350 billion

GENEVA - Agence France-Presse
Disasters cost world economy $350 billion

New vehicles are submerged in flood waters at the Honda plant in Thailand’s Ayutthaya. Flooding in Thailand and Australia caused over $10 billion in insurance claims. REUTERS photo

Natural and man-made catastrophes have cost the world economy $350 billion (270 billion euros) and 30,000 lives this year, reinsurer Swiss Re said yesterday.

“2011 will be the year with the highest catastrophe-related economic losses in history, at $350 billion,” the company said in a statement. The figure compares to $226 billion in 2010.

According to preliminary estimates, total insured losses for the global insurance industry from disasters reached $108 billion in 2011 - more than double the 2010 figure $48 billion and the second highest on record.

“2011 would have been the costliest year ever for the insurance industry if Japan had been more fully insured,” said Swiss Re, referring to the earthquake which sparked a tsunami and the Fukushima nuclear disaster in March.

“On top of people losing their loved ones, societies are faced with enormous financial losses that have to be borne by either corporations, relief organizations or governments and, ultimately, taxpayers,” said Kurt Karl, Swiss Re’s chief economist.

Insurance claims

The Japan quake cost the insurance industry about $35 billion, though total losses were near $210 billion. Total losses from the New Zealand quake which hit in February stood at $15 billion, but most of this was covered by insurers, Swiss Re said.

The most expensive year for insurers was 2005, the year when Hurricane Katrina hit the United States, which along with other disasters cost the industry $123 billion.

On top of the quakes in Japan and New Zealand, severe flooding in Thailand and Australia this year triggered more than $10 billion in insurance claims.