Property-casualty insurers' catastrophe losses in 2006 were thelowest in 19 years at $15.9 billion, when adjusted for inflation,according to Swiss Re's latest sigma study.

The Zurich-based reinsurer said last year's catastrophe losstotal was low despite a recorded 349 natural catastrophes andman-made disasters because most of them impacted developingcountries with low property values. The disasters killed more than31,000 people.

Low insurance penetration in developing countries also meantthat only one third of $48 billion in economic losses in 2006 wasactually covered by insurance, Swiss Re said. Overall, the studyfound 2006 brought property insurers the third lowest catastrophelosses of the past 20 years–only 1997 and 1988 were less expensive(after allowance for inflation).

The breakdown of insured losses was $11.8 billion for naturalcatastrophes and $4 billion for man-made disasters, according tothe report.

Low catastrophe loss figures, Swiss Re said, were attributablemainly to the calm hurricane season in the United States and theabsence of any highly damaging events in Europe.

The report listed three events that ran into the billions: twoU.S. tornados in April and a typhoon in Japan in September.

But Swiss Re warned that in future higher insured losses can beexpected following a rising trend, due mainly to weather-relatedcatastrophes.

The report also noted the increasing concentration of propertyvalues and urban encroachment into highly-exposed regions. Swiss Resaid the effects of global warming are also likely to aggravate theloss situation and climatologists assume that shifting climatezones could lead to weather events previously restricted to extremeregions, spreading to other parts of the world.

The company noted that insurers have modified their catastrophesimulation models, where appropriate, to bring them into line withhigher expected damage– especially in the light of the recordlosses in 2004 and 2005 and an increasingly volatile climate.

The company noted that its sigma reports now take into accountNational Flood Insurance Program flooding damage in the UnitedStates. As a result of this change, it said the insured loss ofHurricane Katrina, for example, has been revised upward to $66billion compared to and earlier figure of $49 billion withoutNFIP.