Friday 16th December 2011 2 Comments
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The Feb. 22 earthquake that devastated Christchurch made up 11 percent of the estimated US$108 billion of insurance losses from catastrophes and man-made disasters in 2011, which was second only to 2005’s Hurricane Katrina claims, Swiss RE says.
The global insurer says total losses for the industry are more than double the $48 billion in 2010. Losses reached $123 billion in 2005, when hurricanes Katrina, Wilma and Rita struck the US and other Gulf states
“If Japan had been as well insured as other countries with high seismic risk, such as New Zealand, the overall industry tally would have been much higher” in 2011, said Kurt Karl, Swiss Re’s chief economist, in a statement on its website.
“Additional claims from the ongoing massive floods in Thailand or from winter storms which may yet hit Europe have the potential to bring figures for the full year even closer” to 2005’s record, he said.
The Feb. 22 earthquake in Christchurch ranked as the second-most costly insured catastrophe this year, at US$12 billion, according to Swiss Re. “Thanks to high earthquake insurance penetration rates, particularly in residential properties, the insurance industry will pay most of the losses,” Karl said.
Combined with last year’s September quake it caused $20 billion worth of damage to the region, based on a Treasury estimate.
At more than US$47 billion, earthquake-insured claims for 2011 are the highest ever recorded, Karl said.
Japan will cost the industry more than US$35 billion, with economic losses likely to be higher once damage to nuclear facilities and disruption to worldwide supply chains are included.
Suncorp-Metway, which owns the New Zealand’s Vero general insurer and Asteron life insurer, estimates its net exposure to the earthquake will be $60 million, while IAG, which has State Insurance, said the impact will be negligible because of reinsurance cover.
IAG today announced an agreement to buy AMI, the Christchurch-based insurer bailed out by the government this year, for $380 million in a deal that will see the target’s quake liabilities transferred to a new state-owned company.
In the wake of the February quake, Prime Minister John Key described it as “seven times worse than Hurricane Katrina” in the United States, in terms of its economic impact. The Christchurch quake will cost about 7 percent of New Zealand’s gross domestic product, whereas Hurricane Katrina was only about 1 percent of US GDP.
In addition to the earthquakes in New Zealand and Japan, severe flooding in Thailand and Australia triggered above US$10 billion in insurance claims. Two massive tornado events in the US caused nearly US$14 billion in claims. Hurricane Irene cost the industry nearly US$5 billion in property damage.
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