Munich Re has published a report and data on the natural catastrophe loss events which have impacted the world and the reinsurance sector in the first half of 2011. To date, 2011 is now the most disastrous on record according to Munich Re, with total economic losses for the first six months of the year reaching a staggering $265 billion, more than the previous costliest year of 2005 which saw $220 billion of economic losses.
The $265 billion of economic losses is more than five times higher than the first-half economic loss average for the previous ten years. They estimate that insured losses for the first half of the year are around $60 billion, which is nearly five times greater than the average for first-half insured losses since 2001.
Typically the second half of the year generates the most losses due to the tropical storm and winter storm seasons around the world, so 2011 as a whole could be a record for losses by a long way when we reach the end of the year.
The actual number of loss events for the first half of 2011 is somewhat below average the ten-year average of 390, with 355 events contributing to the data Munich Re cite. Of course the devastating earthquake and tsunami in Japan is the cause of the massive jump above average, contributing around $210 billion of economic losses and $30 billion of insured losses.
Munich Re highlight the rarity of having so many extreme loss events in the same six month period. Munich Re Board member Torsten Jeworrek said: “The role of insurance in such a case is to bear these seldom catastrophe losses and, by so doing, assist with the rebuilding effort and the economic recovery of the region concerned. We were not surprised by any of the events when seen as single events, since they were within the range of what our risk models led us to expect. The accumulation of so many severe events of this type in such a short period is unusual, but is also considered in our scenario calculations. Thanks to our risk know-how and financial strength, we are able to exploit business opportunities that arise following the increased demand for risk transfer, which is often accompanied by a decreasing supply of capacity.”
We list the five largest losses by insured losses below (full details available in this PDF from Munich Re):
|Date||Country / Region||Event||Fatalities||Economic losses (US$ m)||Insured losses (US$ m)|
|22-28.4.2011||USA||Severe storm/ tornadoes||350||7,500||5,050|
|20-25.5.2011||USA||Severe storm/ tornadoes||170||7,000||4,900|
|Dec 2010/Jan 2011||Australia||Floods||35||7,300||2,550|
The graphic below is a screenshot of Munich Re’s world map of natural catastrophes from the first half of 2011 which was also published today. Click on the map to download a larger version in PDF format.