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US led the world in catastrophe losses last year

Fri Feb 1st, 2013 on     Insurance Claims,    

Superstorm Sandy missed Florida, but as we have noted in past posts the storm wrought havoc further up the East Coast. As the insurance industry looks back at 2012, it has become clearer that Sandy was a key component of insurance companies’ higher than normal catastrophic losses last year.

The storm itself caused approximately $28.2 billion in losses that were covered by existing insurance policies. Combined with losses from the epic drought and half a dozen other billion-dollar natural disasters, Sandy put the U.S. at the top of the worst-hit nations last year. The two events accounted for almost two-thirds of losses across the globe.

Worldwide, the industry racked up a total of $72 billion in insured losses — that is a whopping 36 percent increase over the $53 billion average for the past decade. Total economic losses last year were $200 billion, registering only a little above the average economic loss of $187 billion over the last 10 years. Why? The two most devastating events were in the U.S., where more property owners and business owners have insurance coverage than in other countries.

In 2011, Oceania and Asia were the biggest losers.

Aon Benfield reported these findings earlier this month. Analysts noted, too, that 2012 marked the seventh consecutive year without a major hurricane hitting the U.S. The last time the country went this long without a major landfall was the 1860s. And, the report added, the fears of increasing natural disaster activity — like the jump in tornadoes in 2011 — may be unfounded: While the numbers look bad, when economic losses are viewed as a percent of global gross domestic product, there hasn’t been much change for the past 30 years.

Source: Business Insurance, “2012 catastrophe losses considerably higher than average: Aon Benfield,” Bill Kenealy, Jan. 25, 2013

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