Catastrophes Caused $18.5B Insured Losses In ?03

Catastrophes Caused $18.5B Insured Losses In ?03

NU Online News Service, March 4, 9:58 a.m. EST?In 2003, catastrophes around the world claimed 60,000 lives while causing $18.5 billion in insured losses, according to updated figures from Swiss Re.[@@]

The total economic losses?insured as well as uninsured?from catastrophes in 2003 amounted to an estimated $70 billion.

In the 2003 total, man-made disasters accounted for $12 billion of economic losses, more than half of which came from the three-day power outage in the United States during August.

And while the insured property loss figure of $18.5 billion is below those of recent record years, Swiss Re cautioned that catastrophes have been causing billions of dollars in losses every year since the late 1980s and that there are strong indications that this loss trend will continue?driven by densely populated areas, higher concentrations of insured values and development in danger zones.

Swiss Re observed that there were 380 catastrophes registered in 2003 in which nearly 60,000 people lost their lives. Among the fatalities, over two-thirds were victims of earthquakes.

The most tragic disaster in terms of loss of life was the December earthquake in the Iranian city of Bam in which 41,000 people were killed. In addition, an earthquake that hit Northern Algeria during May claimed 2,260 lives, the study noted.

"If you look at the number of lives lost by catastrophes, it was one of the more severe years, and that was strongly driven by these two earthquakes," said Thomas Holzheu, senior economist at Swiss Re Economic Research & Consulting. "But there is a disconnect if catastrophes happen in developing countries, where there are differences in insured values. So you have a discrepancy there, between developing or emerging markets and developed markets."

Among insured losses, natural catastrophes were responsible for significantly more losses than major man-made disasters, which caused insured losses of $2.3 billion in 2003, mostly from large industrial fires, explosions and the loss of space satellites.

Swiss Re also observed that six events generated insured property losses in excess of $1 billion dollars, together accounting for more than half of all insured CAT losses in 2003.

During April, a storm system swept across the United States from the Northeast to the Midwest, while in May, a record series of more than 400 tornadoes hit the Midwest with hailstorms. These two events cost insurers $3.2 billion and $1.6 billion, respectively.

Then in September, Hurricane Isabel swept across the Eastern Seaboard and Ontario, generating an insured property loss of $1.7 billion. And between October and November, two forest fires in California resulted in extensive property damage in the populated forestry zones. In France, flash floods in the southern region caused insured losses of $1 billion in December.