2009 has seen an impressive recovery from last year’s financial crisis and the uncertainty caused by losses from Hurricane Gustav and Hurricane Ike. This recovery has been driven by the easing of financial markets and low catastrophe activity. A very quiet hurricane season, coupled with relatively low losses for other weather-related events, meant insured losses reached USD24 billion in 2009(1), the lowest figure since 2006 and a significant fall from USD52.5 billion(2) in 2008.
Weather-related events continued to be the largest source of losses in 2009 at USD21 billion, while man-made disasters triggered insured losses of USD3 billion. Total losses (both insured and uninsured) reached USD52 billion in 2009, while some 12,000 people lost their lives to natural catastrophes and man-made disasters.
Figure 1 shows Swiss Re’s estimate of global insured losses since 1970 with the provisional amount for 2009 at constant prices. The 10-year moving average of insured losses retreated slightly, falling from USD38.1 billion in 2008 to USD36.2 billion in 2009.
Figure 1: World Catastrophe Losses (Source: Swiss Re, Guy Carpenter)
Five events incurred insured losses of more than USD1 billion in 2009(3) . Three were related to severe weather and tornadoes in the United States, while Windstorm Klaus and severe summer hailstorms caused significant losses in Europe. In contrast to the United States, Europe suffered above-average insured losses in 2009.
Windstorm Klaus hit France and Spain with hurricane-force winds on January 23 and 24, leaving a trail of destruction and disruption as roofs were ripped off houses and trees were downed. Wind gusts peaked at 195 kmph (120 mph), killing 25 people and cutting power to at least 1.7 million households. The storm was the most powerful to hit France since Windstorm Martin in 1999. Windstorm Klaus was the most costly event of 2009 after it triggered insured losses of around USD3.5 billion(3).
Elsewhere in Europe, severe hailstorms hit Switzerland, Austria, Poland and the Czech Republic on July 23, causing a total insured loss of USD1.25 billion(3). The hailstorms, accompanied by powerful winds, left a trail of destruction in central and eastern Europe. Switzerland was particularly badly hit after tens of thousands of buildings and vehicles were damaged by hailstones the size of golf balls. A Guy Carpenter report on the storms in Switzerland said the event is expected to have a substantial influence on the Swiss 2010 reinsurance renewal process after insurers paid out claims totalling more than CHF733 million (USD725 million)(4).
The three other events to trigger losses in excess of USD1 billion all occurred in the United States after severe weather and tornadoes hit southern and Midwestern regions of the country in February, April and June. The February event triggered the second biggest loss of 2009 with insurance claims totalling around USD1.35 billion(5). Meanwhile, the events in April and June caused insured losses of USD1.13 billion(6) and USD1.05 billion(7), respectively.
(1) Swiss Re Press Release -November 30, 2009
(2) Swiss Re’s Natural catastrophes and man-made disasters in 2008
(3) Swiss Re Press Release -November 30, 2009
(5) ISO PCS Catastrophe Bulletin Serial No. 63
(6) ISO PCS Catastrophe Bulletin Serial No. 68
(7) ISO PCS Catastrophe Bulletin Serial No. 78