Tsunami Losses Could Be Less Than $4B
NU Online News Service, March 16, 1:10 p.m. EST?Insurance losses from last year's tsunami that took more than 170,000 lives could be less than $4 billion, according to a report from Guy Carpenter.[@@]
London-based Guy Carpenter & Company Inc., a subsidiary of Marsh & McLennan Companies Inc., headquartered in New York, said insured and reinsured losses are expected to be "relatively minimal" because most of the destruction occurred in areas that were largely uninsured.
Total insured losses are expected to range from $2.5 billion to $4 billion, Guy Carpenter said, with life and health costs reaching $1 billion. Reinsured losses are not expected to be large, the reinsurance broker added.
The report, "Tsunami: Indian Ocean Event and Investigation into Potential Global Risks," said that tsunamis are a widespread phenomenon with more than 1,100 recorded globally since 1900. The Pacific Ocean sees the most, averaging about eight a year. The Atlantic Ocean, Indian Ocean and Europe experience about 1.7 a year.
The tsunami which struck Southeast Asia and the Eastern Coast of Africa on Dec. 26, 2004, was caused by a 9 magnitude undersea quake on the 10-point Richter scale.
Among the report's other observations:
? The Pacific Ocean holds the most risk to life and property for this kind of peril, as this region has the highest frequency and greatest potential for destructive tsunami events.
? The Atlantic Ocean contains several areas that could trigger a large tsunami. However, it is probable that the frequency and magnitude of events would be less than in the Pacific Ocean.
? With three major events in the past 150 years, the Indian Ocean faces a high incidence of tsunamis, with potentially devastating effects.
? While plans are in place to extend the reach of the existing warning system to affected regions not yet covered, an effective network cannot prevent property destruction or limit insured losses in vulnerable areas.
Copies of the report are available at www.guycarp.com.
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