Disaster losses total US$130b in 2013

GENEVA - DISASTERS caused global economic losses of about US$130 billion (94.5 billion euros) this year, Swiss Re said yesterday, but there was little insurance coverage for the deadliest catastrophe, Typhoon Haiyan in the Philippines.

In a preliminary estimate of the impact of natural and man-made disasters, the Zurich-based reinsurance group noted that the economic impact was sharply down from US$196 billion in 2012, a year marked by Superstorm Sandy in the United States.

But the total loss of life climbed to about 25,000 people from 14,000 in 2012, it said.

Last month’s Typhoon Haiyan in the Philippines was the deadliest single disaster, killing more than 7,000 people, Swiss Re noted.

But despite the devastation wreaked, insured losses from the typhoon are expected to be modest, it said.

It pointed to the low proportion of insurance coverage in the Philippines – a common issue in developing nations, which are also amongst the globe’s most disaster-prone countries.

Swiss Re did not release an estimate for the Philippines, but insurance- and disaster-risk modellers AIR Worldwide recently put the economic losses at US$6.5-14.5 billion, and insurance coverage at US$300-700 million.

The latter figure accounted only for physical damage to insured buildings and their contents, and did not include such areas as losses of crops or business interruption, AIR Worldwide noted.

“In many parts of the world, insurance penetration remains low,” Swiss Re’s chief economist Kurt Karl said in a statement.

“Together with preventative measures, insurance can lessen the destructive impact and financial burden that large catastrophic events can have on people’s lives.”

“It can also help accelerate reconstruction efforts, as we have seen in areas where insurance penetration is higher,” Swiss Re’s chief economist added.

The insurance industry is likely to cover about US$44 billion of the 2013 disaster losses, Swiss Re said.

AFP