Swiss Re: 2004 Insured P&C Loss Nearly $50B

National Underwriter News
March 1, 2005

Man-made and natural catastrophes last year caused worldwide insured losses of $49 billion--the most expensive in history for insurers, according to a Swiss Re Study.

“It is the most expensive year in terms of insurance events--a remarkable year,” said Thomas Holzheu, senior economist at Swiss Re.

The losses, he said, were due mostly to damage from hurricanes in the United States and typhoons in Asia.

According to the study, loss of life from catastrophes exceeded 300,000, with the Dec. 26, 2004 Indian Ocean tsunami alone responsible for 280,000 dead or missing.

Mr. Holzheu said that in terms of lost lives, 2004 was the most severe period in the last 35 years.

Swiss Re categorizes man-made catastrophes as any destructive event that is not natural, such as ship disasters, industrial fires or rail crashes.

Swiss Re's sigma statistics for 2004 identified around 330 natural and man-made catastrophes worldwide.

The tsunami in the Indian Ocean affected 12 coastal states, it was noted.

According to the sigma study, the total losses directly attributable to natural and man-made catastrophes before insurance was $123 billion--and of this figure, $49 billion was covered by property insurance.

Breaking down the insured loss, Swiss Re said hurricanes in the United States and neighboring countries cost insurers around $32 billion, with typhoons in Japan and neighboring countries accounting for another $6 billion.

These record figures, according to the study, were the result of both a higher number of storms--13 U.S. hurricanes and 10 typhoons in Japan and the increasing concentration of insured assets in highly exposed coastal regions.

Swiss Re said climatologists attribute the high windstorm frequency to above-average sea-surface temperatures and the high year-round average temperatures measured in the last decade. According to Swiss Re, 2004 was the fourth-warmest year around the world since regular temperature measurements started in 1861.

The researchers said the trend toward increasing concentrations of assets was highlighted by the damage inflicted by the hurricanes in Florida. Swiss Re said the $19 billion in losses should be seen against the background of 70 percent population growth between 1980 and 2001 as the state's gross domestic product increased by 130 percent.

Swiss Re said that statistics show insured losses have taken on a new dimension. Unlike in 1992 and 2001, when one-off events such as hurricane Andrew and the Sept. 11 terrorist attack dominated the claims burden, the record impact in 2004 was due to an aggregation of several costly losses.

Available in English, French, German, Italian and Spanish, the sigma study--"Natural Catastrophes and Man-Made disasters in 2004: More than 300,000 Fatalities, Record Insured Losses"--can be obtained online at:

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