Editor's Note: This article originally appeared in National Underwriter, P&C.
Insured losses from the earthquake in Haiti are likely to be small, as insurance penetration there is far below one percent, according to a Munich Re expert addressing an audience via webinar.
During last week's presentation entitled, "2009 Natural Catastrophe Year in Review," Ernst Rauch, head of corporate climate change for Munich Re, said losses will be small, but he added there are some facultative risks with high insured values that have been hit and could influence the overall market loss.
He also said the Caribbean Catastrophe Risk Insurance facility (CCRIF) pool will be activated, which will result in a maximum payout of $7.7 million.
The Munich Re panel also discussed catastrophe losses in the U.S. and around the world. The panel noted that insured losses are lower than the average of the last 10 years, but the number of events was greater than the last 10 year average. One expert said insurers could look forward to an increasing number of disasters in the decade ahead.
In the United States, Carl Hedde, head of risk accumulation for Munich Re America said insured losses totaled $11.1 billion for 2009, less than the 1999-2008 average of $24.5 billion. While weather-related losses were below 2008 losses, Mr. Hedde said insured losses due to weather perils were the highest on record for a year without a hurricane landfall.
He said losses due to thunderstorms, which totaled $13.7 billion, were at near-record levels. Conversely, he said winter storm losses were the lowest in eight years.
The year saw seven "significant events," in the United States, defined as causing economic losses of $1 billion or more and/or 50 fatalities. Of those events, five were thunderstorms, while a flood and a winter storm made up the other two.
Losses from wildfires totaled $185 million, the lowest annual total since 2006, Mr. Hedde said.
Overall, he characterized 2009 as "fairly quiet" for U.S. cat losses.
Globally, 2009 saw 850 natural catastrophes, up from a 10-year average of 770, according to Mr. Rauch. Insured losses totaled $22 billion, down from the 10-year average of $36 billion.
The costliest global event was Winter Storm Klaus, which affected parts of Europe causing $3 billion in insured losses, he said. Three of the top five costliest events were severe storms and tornadoes in the U.S.
In total, 43 percent of 850 events were storms, which caused 82 percent of the year's insured losses, Mr. Rauch said. Floods and mass movement made up 39 percent of the events, but caused just 6 percent of insured losses.
Insurance Information Institute President Robert Hartwig said while losses in 2009 were less than half of 2008, losses in the 2000s decade were more than double losses in the 1990s. He called the 2000s the "Decade of Disaster" and said insurers should expect the coming decade to be even worse.
On top of the natural catastrophe losses, Mr. Hartwig said the economic crisis, while weathered effectively by the property-casualty industry, consumed 16 percent of the industry's capital – more than any major catastrophic event over the last 20 years.
Phil Gusman is associate editor of National Underwriter, part of Summit Business Media's P&C Magazine Group, which includes Claims.
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