Disaster losses hit new record

DISASTERS this year have already caused the worst economic losses on record, Munich Re said yesterday.

Catastrophes in Japan, New Zealand, Australia and the US led to $265bn (£166bn) of losses in the first six months of the year alone – far above the previous record of $220bn in 2005.

The devastating 9.0 magnitude earthquake and tsunami to hit Japan in March caused the highest losses of any disaster ever recorded.

The quake, which caused more than 15,000 fatalities and tipped Japan’s economy back into recession, resulted in $210bn of economic losses, though the $30bn of insured losses were lower than other disasters.

Earthquakes in Christchurch, New Zealand that flattened the city’s business district and damaged its cathedral, caused $20bn of economic losses – but half of that was insured.

Munich Re said such a spate of catastrophes in such a short period was “very rare”.

“We were not surprised by any of the events when seen as single events,” said Munich Re director Torsten Jeworrek. “The accumulation of so many severe events of this type in such a short period is unusual.”

Insurers have reeled from six months in which insured losses hit $60bn – five times higher than the average first-half loss in the past decade. The figure is particularly unusual as losses in the first half of the year are generally smaller than second-half losses because hurricanes and typhoons, which strike in the Americas from May to September, cause more costly damage each year.

Tornadoes in May and June caused $15bn of economic losses and $10bn of insured losses, with more storms expected in the coming months.