Deaths, Costs From Disasters To Climb: Swiss Re
Costs and deaths from natural catastrophes will continue to climb, Swiss Re, the world's second biggest reinsurer, warned in its latest study.
"Population growth, the higher number of people living in urban areas which are located in seismically active areas as well as rising wealth" are among the main reasons why the reinsurance industry is hit by a rise in insured losses and countries record more fatalities, the Zurich-based reinsurer wrote.
There is no long-term trend of increasing global earthquake activity despite recent events in Japan and New Zealand, said Balz Grollimund, one of the study's authors.
According to the study, natural catastrophes and (to a lesser extent) man-made disasters led to a tripling of global economic losses to $218 billion in 2010, compared to 2009.
For the global insurance industry, costs rose by more than 60 percent to $43 billion.
Although the hurricane season was considered unusually benign, the devastating earthquakes in New Zealand and Chile were responsible for the bulk of the increase in costs.
The number of fatalities due to disasters reached a 34-year high at approximately 304,000, Swiss Re says.
The Haiti earthquake, the Russian heat wave and summer floods in China and Pakistan were responsible for the sharp rise in deaths in 2010.
In 2009, 15,000 people died from natural catastrophes and man-made disasters.
In spite of unusually high earthquake-related losses in 2010, total costs were still in line with the 10-year average, according to Swiss Re.
But with the disasters in Japan and New Zealand in the first few months of 2011, the reinsurer has already warned that total economic losses as well as insured losses will be above average in 2011.
Last week, Swiss Re disclosed it expected insured losses from the Japan quake and tsunami to amount to $1.2 billion, while industry leader Munich Re put the insured losses at $2.1 billion, prompting it to cut its guidance for the first quarter.
Analysts believe reinsurers will be able to push through higher rates in the upcoming renewals in Japan.
According to ratings agency Moody's, early reports for April renewals indicate that Japan earthquake reinsurance prices could rise by at least 20 percent.