Insurance industry damage claims from natural disasters like the earthquakes in Japan and New Zealand reached a record $105 billion in 2011, Munich Re, the world's biggest reinsurer, said on Wednesday. The cost to insurers from the earthquake and tsunami in Japan in March, which caused nearly 16,000 deaths, was estimated at $35 billion to $40 billion, the company said in its annual review of the prior year's natural disasters.
That equalled the insured cost of all the natural disasters to strike the United States during the year, it said. An earthquake in New Zealand in February added a further $13 billion to insurers' claims payout for the year, Munich Re said. The earthquakes together made up about half of last year's total insured losses from natural catastrophes, which topped the previous record of $101 billion set in 2005, when Hurricane Katrina devastated New Orleans. Munich Re compares losses in original dollars, and not adjusted for inflation.
"Normally, it is the weather-related natural catastrophes that are the dominant loss drivers," Munich Re said. In the United States, 171 events produced $35 billion in economic losses. Nearly $26 billion of that came from thunderstorm events, shattering the previous record by more than $10 billion. Among those storms were tornado outbreaks in April and May that rank among the 10 largest US weather disasters ever.
The Insurance Information Institute said that if taken as a whole, and adjusted for inflation, the 2011 spring tornado season was the fourth-costliest disaster in US history, trailing only hurricanes Katrina and Andrew and 9/11. Despite the heavy payouts, many observers say that the claims were not big enough on their own to provide a broad boost to reinsurers' pricing strength relative to their insurance company clients, because reinsurers still have plenty of excess capital.
Total economic losses last year, including those not covered by insurance, totalled $380 billion, Munich Re said, topping the previous record of $220 billion set in 2005. The US share of economic losses was $75 billion. Munich Re's figures differ somewhat from those of rival Swiss Re published last month, which include man-made disasters in the calculation.
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