Swiss Re is reporting that, according to preliminary sigma estimates, total economic losses from natural catastrophes and man-made disasters were US$56 billion in the first half of 2013; disasters claimed 7,000 lives.
The overall economic losses to society of US$56 billion were below the US$67 billion of the first half of 2012. Insured losses were US$20 billion, of which US$17 billion stemmed from natural catastrophes, in large part due to widespread flood events. This was lower than the US$21 billion in the first half of 2012 and also below the average of the last 10 years. Man-made disasters triggered an additional US$3 billion in claims, unchanged from the first half of 2012.
In the first half of 2013, flooding was a main driver of natural catastrophe-related losses, causing an estimated US$8 billion in insurance claims globally. As a result, 2013 is already the second most expensive calendar year in terms of insured flood losses on sigma records.
In 2011, the Thailand event alone brought record flood losses of more than US$16 billion.
In June, heavy rains in central and eastern Europe caused massive floods that resulted in economic losses of close to US$18 billion and claimed 22 lives. The estimated US$4 billion cost for the insurance industry will make this the second most expensive fresh water flood event on sigma records.
This year's flooding in Europe has also been more expensive than the 2002 floods in the same region which cost the industry over US$2 billion (US$3 billion at current prices). Rains and subsequent flooding also hit Alberta, Canada, in June, generating insured losses estimated at US$2 billion, the highest insured loss ever recorded in the country, Swiss Re said.
In January, Cyclone Oswald brought flood damage yet again in Australia, amounting to US$1 billion in insured losses. Furthermore, India, Southern Africa, Indonesia, and Argentina likewise experienced heavy rains in the first half of 2013, which caused large-scale flooding and the loss of many lives.
In India, 1,150 died as a result of flooding in June and many more are still missing. This flood caused the most loss of life as a single event in the first half of 2013.
Jens Mehlhorn, head of flood risk at Swiss Re, said, “Flooding continues to wreak havoc across all areas of the world. No one is immune from this ever-present disaster threat. Sadly, without insurance, the impact of these events is severe for many. While we cannot stop future floods, we believe that preventative actions can be taken to mitigate the overall impact of extreme weather events.”
Harsh spring weather spawned deadly tornadoes in the US Midwest. A tornado outbreak in May caused the loss of 28 lives and insured claims of US$1.8 billion. The loss of life and property was mostly concentrated in Moore, Oklahoma, hit by a tornado rated 5, which is the highest rating on the Enhanced Fujita scale.
Another US$7 billion in insured catastrophe losses resulted from other natural catastrophes and man-made disasters across the world in the first half of 2013.
Kurt Karl, chief economist at Swiss Re, said, “Though 2013 has so far been a below-average loss year, the severity of the ongoing North Atlantic hurricane season, and other disasters such as winter storms in Europe, could still increase insured losses for 2013 substantially.”
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].