USD 370 billion; Last Year’s Highest Economic Losses in History

The insurance industry weathered 2011 soundly despite experiencing the second-largest insured losses ever, at USD 116 billion

2011 also brought the highest insured earthquake losses, at USD 49 billion

Flooding in Thailand resulted in the highest insured losses ever for a single flood event, at USD 12 billion

 Swiss Re’s latest sigma study reveals unprecedented economic losses of USD 370 billion from natural catastrophes and man-made disasters in 2011. Despite immense insured losses of USD 116 billion (a 142% increase over the previous year) arising from record earthquake and flood losses, the insurance industry weathered the year well and played a key role in risk management and post-disaster recovery financing.

 Highest ever recorded economic losses

 In 2011, total economic losses to society due to disasters (both insured and uninsured) reached an estimated USD 370 billion, compared to USD 226 billion in 2010. The earthquake in Japan, the largest known in terms of magnitude to have ever hit the country, accounted for 57% of 2011’s economic losses. Altogether, natural catastrophe insured losses came to around USD 110 billion, while losses from man-made disasters were around USD 6 billion, making 2011 the second-highest catastrophe loss year ever for the insurance industry.

 Kurt Karl, Swiss Re’s Chief Economist, says: “Last year saw extraordinary and devastating catastrophic events. The earthquakes in Japan, New Zealand, and Turkey, as well as the floods in Australia and Thailand, were unprecedented and brought not only massive destruction but also the loss of thousands of people’s lives. Yet two-thirds of the staggering USD 370 billion in economic damage will be shouldered by corporations, governments, relief organisations, and ultimately individuals, pointing to the still widespread lack of insurance protection worldwide.”