Editor’s Note: This article originally appeared in National Underwriter, P&C.

Swiss Re said worldwide natural catastrophes and man-made disasters, which killed 15,000 people last year, cost insurers $26 billion, $26.5 billion less than the firm reported for 2008.

In 2009 the total economic loss was $62 billion compared with $269 billion for 2008 when insured loss was $52.5 billion, the company said in its latest sigma report.

Insured losses, Swiss Re said, were below average due to a calm U.S. hurricane season. The portion of insured losses last year attributable to 133 natural catastrophes was put at $22 billion and losses from 155 man-made disasters totaled $4 billion.

North America’s insured loss was listed at more than $12.7 billion.

The death toll was far below the 240,500 Swiss Re counted last year. The highest number of 2009 fatalities was in Asia, where nearly 9,400 people died.

Swiss Re’s report said the $36 billion gap between economic loss and insured loss for 2009 suggests lack of insurance coverage leaves many individuals and governments vulnerable after a catastrophe. With yearly losses increasing, so is the need for insurance coverage.

The report noted that a higher value concentration of wealth in loss prone regions and a trend towards more insurance coverage, plus global warming and the related higher risk of extreme weather conditions contribute to the loss trend.

Thomas Hess, Swiss Re chief economist, in a statement warned “The probability that we see natcat losses as low as those in 2009 is less than 35 percent. We have already seen significant events in 2010 with winter storm Xynthia in Europe or the earthquakes in Chile and Haiti.”

Estimates of the Chile quake insured loss have been as high as $10 billion with a possible $30 billion economic loss. Insured loss estimates for Xynthia have reached $4 billion.

Mr. Hess said, “Given their high volatility, [2010] losses could easily be three to five times what they were in 2009. In 2005, insured losses set a record when they soared to $120 billion. I would not be surprised if this record is broken in the not too distant future.”

Six 2009 events each triggered insured losses in excess of $1 billion. The costliest event was the European winter storm Klaus, which struck France and Spain in January, and led to insured losses of EUR2.35 billion (nearly $3.4 billion), said Swiss Re.

The report said secondary perils such as flooding, landslides, hail storms, tornadoes, winter storms outside Europe, snow and ice storms, droughts and bush fires are important loss sources but receive little attention with most of the focus on earthquakes, hurricanes and winter storms.

In 2009, more than half of the natural catastrophe loss burden was caused by secondary perils, the report said.

Jens Mehlhorn, co-author of the study, suggested in a statement that “more advanced probabilistic risk assessment models would help to better gauge and price the risk of secondary perils.”

Examining earthquakes, the report noted that since 1970, 360 damaging earthquakes have claimed over 1 million lives. Brian Rogers, co-author of the sigma study commented, “The deadliest earthquakes tend to occur in less economically developed countries and in regions that are usually densely populated and prone to earthquakes. These countries typically have low per-capita income and fewer resources for prevention- and post-disaster management.”

The report said that, “Even in developed economies the current earthquake insurance take-up rates in heavily exposed areas seldom surpass 20 percent.”

Concerning global warming, the report said climate change effects would lead to stronger rainstorms, more flooding and more powerful hailstorms. It said in addition to heavy storms in Europe, climate change may also result in more U.S. tornadoes.

Dan Hays is assistant managing editor of National Underwriter, part of Summit Business Media’s P&C Magazine Group, which includes Claims.

See also: Nor’easter Ravages East Coast