Disasters cost world £168bn

DISASTERS worldwide caused economic losses of more than $200bn (£128bn) in 2010, reinsurer Swiss Re reported yesterday.

Natural catastrophes and man-made disasters, including earthquakes in Haiti and New Zealand and the Deepwater Horizon oil spill, caused economic losses of $220bn (£168bn), more than triple 2009’s $63bn level.

The events caused about 260,000 deaths over the year, the highest number since 1976, according to the report from Swiss Re’s sigma team.

Insurers covered losses of $36bn arising from the year’s disasters, an increase of 34 per cent on 2009, but broadly in line with the 20-year average, said Lucia Bevere, an author of the report.

Eight disasters over the year generated losses to insurers of more than $1bn each, with the earthquake to hit Chile in February most costly, at an estimated $8bn.

But the report exposes a wide disparity between insured losses in more developed markets such as Chile and New Zealand, and the huge human losses in countries such as Haiti or Pakistan left without remedy.

China experienced three of the six most fatal disasters registered this year as a result of monsoon floods and mudslides but is not featuring among insurers’ largest covered losses, as people and institutions are under-insured.

Bevere said insurers could help shift the balance of costs from post-disaster management to protection, lowering the cost of the event.

Insurers should keep working to increase their coverage in developing countries to ensure victims of disasters are not left to bear all costs.

“Insurance means people will not be left alone in facing the financial consequences of a disaster,” she said.