Man-Made Catastrophes' Insured Loss Up 46% Last Year

Insured losses from catastrophes of a manmade and technological nature totaled $7 billion last year, some 46 percent higher than the annual average of $4.8 billion, according to Swiss Re.

Those statistics were cited today in a report by Guy Carpenter, reinsurance brokerage on man-made cats.

The firm said there were 19 events where losses exceeded $50 million with two occurrences in Australia being the most expensive.

Eleven countries saw man-made cats with losses ranging from $80 million to nearly $2 billion.

The highest man-made cat insured loss, Guy Carpenter said, came from the June 3 explosion and fire at an Apache Energy offshore gas plant at Varanus Island, Western Australia, which totaled $1.8 billion.

A $1.5 billion business interruption loss was recorded for BHP Billiton when flooding that began in January and stopped production at seven coal mines in Central Queensland.

In the United States two events caused losses of more than $400 million, the Jan. 7 Severstal steel plant blast furnace explosion in Dearborn, Mich. and the June 1 Universal Studios fire in Los Angeles, according to the brokerage.

Guy Carpenter said in November the terror attack in Mumbai, India, that killed 179 and badly damaged two luxury hotels could result in insurance claims of up to $600 million.

The firm said that losses in the mining, energy and steel industry were exacerbated by the impact of record high commodity prices on business interruption cover and noted that the Apache Energy's offshore gas plant explosion and fire hit "one of the word's most significant mining areas, reducing the supply of natural gas to the region by 30 percent."

Guy Carpenter's full report can be read online at http://www.gccapitalideas.com/wp-content/uploads/2009/03/manmade-cats-in-2008.pdf.