Disaster insurance2011: costliest ever year for earthquakes, weather-related disasters

The massive storm of February 2011 // Source: ecoo.it

A sequence of devastating earthquakes and a large number of weather-related catastrophes made 2011 the costliest year ever in terms of natural catastrophe losses. At about $380 billion, global economic losses were nearly two-thirds higher than in 2005, the previous record year with losses of $ 220 billion.

The earthquakes in Japan in March and New Zealand in February alone caused almost two-thirds of these losses. Insured losses of $105 billion also exceeded the 2005 record ($101 billion).

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.”

A Munich Re release reports that with some 820 loss-relevant events, the figures for 2011 were in line with the average of the last ten years. Ninety percent of the recorded natural catastrophes were weather-related, but nearly two-thirds of economic losses and about half the insured losses stemmed from geophysical events, principally from the large earthquakes. Normally, it is the weather-related natural catastrophes that are the dominant loss drivers. On average over the last three decades, geophysical events accounted for just under 10 percent of insured losses. The distribution of regional losses in 2011 was also unusual. Around 70 percent of economic losses in 2011 occurred in Asia.

Some 27,000 people fell victim to natural catastrophes in 2011. This figure does not include the countless people who died as a result of the famine following the worst drought in decades on the Horn of Africa, which was the greatest humanitarian catastrophe of the year. Civil war and political instability made it very difficult to bring effective aid to the victims.

11 March: Japan
The most destructive loss event of the year was the earthquake of 11 March in Tohoku, Japan, when a seaquake with a magnitude of 9.0 occurred 130 km east of the port of Sendai and 370 km north of Tokyo. It was the strongest quake ever recorded in Japan.

The damage from the tremors themselves was relatively moderate thanks to strict building codes. The