Natural disasters cost insurers USD 65 billion last year, with the United States accounting for nine-tenths of the bill and Superstorm Sandy prompting payouts of USD 25 billion, a leading insurance company said.
However, Munich Re AG said that the total insured losses worldwide were down from a record USD 119 billion in 2011, when devastating earthquakes in Japan and New Zealand cost the industry dear.
The company said total economic costs in 2012 from natural disasters worldwide including uninsured losses amounted to USD 160 billion, compared with the previous year’s USD 400 billion.
Sandy, which battered eastern coastline areas at the end of October, killed at least 125 people in the United States and 71 people in the Caribbean. New York, New Jersey and Connecticut were the hardest-hit US states.
Munich Re estimated insured losses from Sandy at USD 25 billion and total losses at USD 50 billion, though it cautioned that the figures are “still subject to considerable uncertainty.”
That made it the year’s most costly disaster but several other events in the US meant that the country accounted for 90 per cent of insured costs and 67 per cent of overall losses, the company said.Â Over the past decade the well-insured US on average accounted for 57 per cent of insured losses and 32 per cent of overall costs every year.
The lengthy drought that seared swathes of the United States last summer produced 2012’s second-biggest insurance bill.Â Munich Re said the insured losses, being picked up by a public-private crop insurance program, totaled between USD 15 billion and USD 17 billion most of the USD 20 billion worth of overall crop losses.
That was the biggest loss in US agricultural insurance history, comparing with average insured losses of about USD 9 billion a year, Munich Re said.Â Severe storms and tornadoes in March, late April, June and July completed Munich Re’s list of the five costliest disasters for insurers in 2012, each costing USD 2.5 billion.
Back-to-back earthquakes in northern Italy last May caused total losses of USD 16 billion, but only one-tenth of that was covered by insurance.Â Deadly flooding in China in July caused damage worth USD 8 billion, but only a small fraction of that USD 180 million was insured.
Munich Re board member Torsten Jeworrek said in a statement that last year’s heavy losses from weather-related disasters in the US “showed that greater loss-prevention efforts are needed.”
“It would certainly be possible to protect conurbations like New York better from the effects of storm surges,” he added, without specifying how.