Swiss Re reports on insurance industry losses from 2012
The insurance industry faced massive losses due to natural disasters and man-made catastrophes in 2012, according to Swiss Re, one of the world’s leading reinsurance firms. Over the past two years, the insurance industry has been stricken with several catastrophic events. Hurricanes, earthquakes, and an ongoing financial crisis in Europe have all served as major stumbling blocks for the global insurance industry. According to Swiss Re, many of the companies operating in the industry are still fighting to recover from such events, and some may not be prepared to weather the storms of the coming year.
$77 billion in insured losses in 2012
According to Swiss Re, natural and man-made disasters throughout 2012 cost the global insurance industry some $77 billion. This makes 2012 the third costliest year on record. These losses account for approximately two-fifths of the $186 billion in economic losses that were reported during 2012. More than 14,000 lives were lost across 300 catastrophes and man-made disasters during that year. While mad-made disasters, such as wars and mundane events like car accidents, caused significant damage, these disasters account for only a small portion of the damage dealt to the insurance industry.
Hurricane Sandy responsible for major losses in the US
Swiss Re notes that severe, large-scale weather events did more damage than any other type of event. Most of these weather events took place in the U.S., with the most significant among these being 2012’s Hurricane Sandy. The powerful storm alone accounts for $70 billion in economic losses and as much as $35 billion in insured losses. Hurricane Sandy is considered to be one of the most devastating storms that has ever struck the U.S., second only to 2005’s Hurricane Katrina.
2012 considered less costly than 2011
According to Swiss Re, 2012 falls behind 2011 in terms of insured payouts. Payouts in 2011 were much higher due to the Fukushima nuclear disaster in Japan. Other events in the Asian Pacific region also contributed to the costly impact of disasters in 2011. Swiss re notes that several regions of the world that are prone to extreme weathers events could not rely on the financial cushion of the insurance industry due to the low penetration of insurance in these regions.