Reinsurer Munich Re has published a review of the natural catastrophe loss event which impacted around the globe during 2011. According to their data, 2011 insured catastrophe losses reached $105 billion, beating the previous record losses of 2005 which Munich Re recorded as $101 billion.
Economic losses were $380 billion during 2011, much higher than any other year. This is mostly due to the low levels of insurance penetration in Japan which meant that the earthquake and tsunami caused a huge economic loss but a much smaller insured loss. The earthquake in Japan in March and New Zealand in February alone caused almost two-thirds of the losses say Munich Re.
Torsten Jeworrek, Munich Re Board member responsible for global reinsurance business, said; “Thankfully, a sequence of severe natural catastrophes like last year’s is a very rare occurrence. We had to contend with events with return periods of once every 1,000 years or even higher at the locations concerned. But we are prepared for such extreme situations. It is the insurance industry’s task to cover extreme losses as well, to help society cope with such events and to learn from them in order to protect mankind better from these natural perils.”
2011 differed to the average year as the majority of the losses were caused by geophysical events. Usually weather events, which made up 90% of the 820 loss-relevant events recorded by Munich Re, contribute the bulk of the insured losses during a year.Normally gephysical events count for around 10% of losses, but during 2011 they accounted for almost two-thirds.
The global distribution of losses was also unusual during 2011. Normally losses are more evenly distributed with a large proportion being U.S. based if the hurricane season is severe. During 2011 70% of the losses experienced were within Asia Pacific.
You can see the distribution of some of the larger loss events in this map from Munich Re’s report. You can download a larger version of the map here.