A new report from Zurich-based reinsurance giant Swiss Re finds that total economic losses from disaster events during the first six months of 2016 rose 38 percent to $71 billion, as compared with the same period in 2015.
The damage cost insurers $31 billion, a 51 percent increase from last year.
The leading causes of the losses were earthquakes in Japan, thunderstorms throughout much of the United States and Europe, and the massive wildfires in Canada.
|Natural catastrophes comprised $68B of losses
Of the $71 billion in economic losses, natural catastrophes comprised $68 billion of the losses, an increase of $22 billion over 2015. Thunderstorms were the leading cause of the losses in the United States because of three separate weather events involving massive hail damage and high winds, which caused over $7 billion in losses. An April storm in Texas resulted in $3.1 billion in insured losses primarily because of hail damage. Manmade insured disasters accounted for $3 billion in covered losses, $2 billion lower than those in 2015.
In mid-April, multiple earthquakes shook Kumamoto, Japan, including one 7.0-magnitude quake on April 16th, that produced widespread structural damage and building collapses, as well as fires, causing $5.6 billion in damage and killing 64 people. That same day, 668 people were killed when a 7.3-magnitude earthquake hit Ecuador, the single deadliest event for the first six months of 2016. Since so few residents carried insurance, total insured losses were only $400 million.
Europe was not spared either. Several weather events in late May and early June caused significant flooding in France and Germany, resulting in $2.8 billion in covered losses.
Wildfires in the town of Fort McMurray, located in the Canadian province of Alberta, caused $2.5 billion in insured losses, one of the costliest insured wildfire events ever for the insurance industry. The town is the epicenter of the country’s oil sands production. Some reports indicate that insured losses could be closer to $3.6 billion.
While all of these events claimed 6,000 lives, that number is half of those lost in 2015, and well under the more than 300,000 lives lost in events in 1970 (372,320), 1976 (305,539) and 2010 (297,369) because of natural catastrophes.
|Number of catastrophic events has dropped over past decade
There is some good news, as the number of catastrophic events has actually dropped over the past 10 years. The number of manmade events has fallen from 257 in 2005 to 70 so far in 2016, while the number of natural catastrophes has dropped from a high of 161 in 2005 to 81 to date.
The massive flooding in Louisiana and extensive wildfires in California, as well as a possibly more active hurricane season along the East Coast could significantly affect these figures for the second half of the year.
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Patricia L. Harman
Patricia L. Harman is the editor-in-chief of Claims magazine, a contributing editor to PropertyCasualty360.com, and chairs the annual America's Claims Event (ACE), which focuses on providing claims professionals with cutting-edge education and networking opportunities. She covers auto, property & casualty, workers' compensation, fraud, risk and cybersecurity, and is a frequent speaker at insurance industry events. Contact her at [email protected]
