Swiss Re study finds below-average catastrophe losses in 2006

In 2006, natural catastrophes and man-made disasters claimed more than 31,000 human lives worldwide, according to Swiss Re’s latest Sigma study, ‘Natural catastrophes and man-made disasters in 2006’. There were 349 recorded catastrophes. Unlike in the two previous years, natural catastrophes affected mainly developing countries where property values are low, resulting in comparatively light economic losses of $48bn.

The insurance burden incurred in 2006 was $15.9bn, in line with Sigma’s provisional year-end estimate, despite some late-reported loss events. Overall, 2006 brought property insurers the third-lowest losses of the past 20 years – only 1997 and 1988 were less expensive (after allowance for inflation). In all, natural catastrophes cost insurers $11.8bn and man-made disasters around $4bn. These low loss figures were attributable mainly to the calm hurricane season in the US and the absence of any highly damaging events in Europe. Three events ran into the billions: two tornados in the US in April and a typhoon in Japan in September.

Higher losses expected going forward
Over the past decades, insured losses have shown a rising trend, due mainly to weather-related catastrophes. This also reflects an increasing concentration of property values and urban encroachment into highly-exposed regions.

Going forward, Swiss Re says that the effects of global warming are likely to aggravate the loss situation. Climatologists assume that shifting climate zones could lead to weather events that have hitherto been restricted to extreme regions spreading to other parts of the world. Insurers have modified their catastrophe simulation models, where appropriate, to bring them into line with higher expected damage – especially in the light of the record loss years 2004/05 and an increasingly volatile climate.

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•Date: 9th March 2007 • Region: World •Type: Article •Topic: DR general
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