Swiss Re has published a preliminary estimate for the amount of insured losses resulting from natural and man-made catastrophes during the first half of 2011. The first six months of the year have seen some of the largest insured losses for certain perils, including the Japanese earthquake in March and some devastating and costly U.S. tornadoes in April and May.
Based on the events which occurred in the first six months of 2011, Swiss Re say that this year will have the highest insured earthquake losses in history and 2011 is currently the second costliest year for insured natural catastrophe losses on record. With some months to go the industry is hoping that the total insured losses for 2011 won’t reach the levels seen in 2005 when hurricane Katrina hit the U.S.
The figure of $70 billion in insured losses is more than double the figure from 2010 for the first half of the year. Thomas Hess, Swiss Re’s Chief Economist, said; “Given the many people who died in Japan and the sad experiences in New Zealand, 2011 will certainly go down as another year of very tragic earthquakes. In terms of catastrophe claims, 2011 is already the second costliest year in history for the insurance industry. Additional claims from the ongoing US hurricane season or expensive winter storms in Europe have the potential to bring figures for the full year even closer to the record claims of USD 120 billion experienced in 2005.”
The graph below shows insured losses by year since 2005. As you can see, 2011 has the highest by a long way for first half insured losses:
Swiss Re have published a factsheet with more details on the individual events which contributed to the high loss totals.
It’s easy to see how insured losses of this size are putting pressure on reinsurance rates and it won’t take too many more losses for rates to start rising across the property casualty lines globally. Some regions have already seen significant rises, such as Japan, Australia and New Zealand and it wouldn’t take many major events to trigger similar rises around the rest of the world.