NU Online News Service, Dec. 16, 12:26 p.m. EST

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The United States continued to be a source of insuredcatastrophe losses this year despite avoiding a hurricanelandfall.

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In its annual catastrophe report, global reinsuranceintermediary Aon Benfield said severe weather and flooding createdseveral $1 billion insured loss events in the states.

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However, by far, the largest insured event in 2010 was theFebruary earthquake in Chile, causing about $8.5 billion in insuredlosses--more than the next two highest insured loss eventscombined. Windstorm Xynthia, also in February, caused $3.65 billionin insured losses and the New Zealand earthquake in Septemberproduced $3.05 billion.

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Worldwide, catastrophe activity was higher than the last threeyears, with 314 events causing nearly $38 billion in insuredloss.

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In 2009, 222 events produced $20 billion in insured losses.

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Some of the worst natural catastrophes in the world in 2010 hadlittle to no effect on insurers and reinsurers. Flooding in Chinaand Pakistan as well as an earthquake in Haiti caused significanteconomic losses, but the insurance penetration in these areas islow. For instance, the floods in Pakistan caused $30 billion ineconomic losses but only $200 million in damages was insured,according to Aon Benfield.

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Insured earthquake losses in Chile could have been much worse ifinsurance penetration, which is now about 1.2 percent, was higher,said the report. Still, this event was one of the most significantoutside the U.S. ever, said Stephen Mildenhall, chief executiveofficer of Aon Benfield Analytics.

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The top 10 events of the year accounted for more than 61percent, or $22 billion, of the total insured losses. Four of thetop 10 are events in the U.S.

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Rates at the Jan. 1 reinsurance renewals will experiencedownward pressure as supply will continue to outpace demand, Mr.Mildenhall said.

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"At year end 2010 reinsurer capital has grown to record highlevels," he said, adding that reinsurance will remain a "highlyaccretive, cost-effective form of capital for our clients."

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