Natural catastrophes continue to be responsible for the majority of insured and economic losses around the world, but man-made disasters also are having a significant effect.
According to a new report from Zurich-based reinsurance giant Swiss Re, “Natural catastrophes and man-made disasters in 2015: Asia suffers substantial losses,” there were 353 disaster events in 2015, of which 198 were natural catastrophes, the highest ever recorded in one year, with 155 man-made events.
The report also found that total economic losses caused by 2015’s disasters reached $92 billion, down from 2014’s $113 billion, and below the inflation-adjusted average of $192 billion for the previous 10 years.
Globally, Asia was hardest hit, primarily by the April 2015 earthquake in Nepal, estimated at $6 billion, including damage reported in India, China and Bangladesh.
|Global insured losses
Global insured losses in 2015 totaled $37 billion, significantly below the inflation-adjusted previous 10-year average of $62 billion, attributable in large measure to what the report calls a “benign” hurricane season in the United States.
Of the insured losses in 2015, natural catastrophes accounted for $28 billion (about the same as 2014), while man-made disasters totaled $9 billion (up from $7 billion in 2014).
In terms of percentages, the 2015 natural catastrophe insured losses amounted to 0.04% of GDP, and 1.8% of direct premiums written (DPW) on property globally, lower than the respective 10-year annual averages of 0.08% and 3.7%. Overall insured losses from natural catastrophes and man-made disasters were 0.05% of GDP and 2.4% of DPW.
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Deformed shipping containers show the aftermath of two major explosions at the Port of Tianjin, China, which accounted for the largest insured loss in Asia in 2015. (AP Photo)
Port of Tianjin explosion accounts for largest insured loss
The “prize” for the largest insurance loss event — either natural catastrophe or man-made disaster — goes to the two explosions at the Port of Tianjin in China, which are considered one event.
The property claims are estimated at $2.5 billion to $3.5 billion. It’s difficult to obtain exact numbers, the report notes, because of the imposition of exclusion zones at the site of the explosions and restricted access.
The next largest event in 2015 was a February winter storm in the United States, resulting in insured losses of $2 billion. Although Massachusetts was the hardest hit, the storm caused widespread damage in 17 states, mainly from burst frozen water pipes, the weight of ice and water damage to property.
|Other regional highlights
The global report also noted the following losses by region.
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- Europe. In Europe, natural catastrophes and man-made disasters caused total economic losses of $13 billion in 2015, of which $6 billion were insured. The main natural catastrophe losses came from heavy rains and flooding. The primary man-made disasters were the attack on the offices of Charlie Hebdo magazine in January and the terrorist attacks in Paris on Nov. 13.
- Asia. The report noted that the total cost of disaster events in the region was estimated to be around $38 billion, of which a little more than $7 billion was insured. Total losses from the Nepal earthquake in April were estimated to be $6 billion, most of which was uninsured. With respect to insured losses, the biggest natural catastrophe event was Typhoon Goni, which made landfall in Japan on Aug. 25, with losses estimated at $1.2 billion.
- Latin America and the Caribbean. Natural catastrophes and man-made disasters caused total losses of more than $7 billion in Latin America and the Caribbean in 2015. Insured losses were more than $3 billion, mainly as a result of earthquakes, hurricanes and floods. For example, the heavy rains in the Atacama Desert in northern Chile caused an estimated total economic loss of $1.5 billion, while a fire and explosion on a drilling platform in the Bay of Campeche, Mexico, caused the biggest man-made loss of the region (dollar estimates not provided).
- Oceania. Thunderstorms and tropical cyclones were the primary natural catastrophes combining with man-made disasters to cause insured losses of $2.1 billion. In addition, bushfires destroyed homes and vast areas of crop land in Australia.
- Africa. Natural catastrophes and man-made disasters caused total losses of $1.2 billion in 2015, but the insured losses were minor. Floods in Malawi, for example, destroyed or damaged thousands of houses, for an estimated $400 million, but most property was uninsured.
The report also includes a case study of the two explosions in Tianjin, China, as well as an overview of using technologies like drones and remote sensing techniques in disaster risk management strategy.
(Click on graphic to enlarge)
The study is available on Swiss Re’s website (registration required).
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Rosalie Donlon
Rosalie Donlon is the editor in chief of ALM's insurance and tax publications, including NU Property & Casualty magazine and NU PropertyCasualty360.com. You can contact her at [email protected].
