A sequence of devastating earthquakes and a large number of weather-related catastrophes made 2011 the costliest year ever in terms of natural catastrophe losses, according to global reinsurance giant, Munich Re.
At about US$ 380 billion, global economic losses were nearly two-thirds higher than in 2005, the previous record year with losses of US$ 220 billion. Around 70% of economic losses in 2011 occurred in Asia.
The earthquakes in Japan in March and New Zealand in February alone caused almost two-thirds of these economic losses. Insured losses of US$ 105 billion also exceeded the 2005 record of US$ 101 billion. Torsten Jeworrek, Munich Re’s Board Member responsible for global reinsurance business, says: “Thankfully, a sequence of severe natural catastrophes like last year’s is a very rare occurrence. We had to contend with events with return periods of once every 1,000 years or even higher at the locations concerned. But we are prepared for such extreme situations. It is the insurance industry’s task to cover extreme losses as well, to help society cope with such events and to learn from them in order to protect mankind better from these natural perils.”
With some 820 loss-relevant events, the figures for 2011 were in line with the average of the last ten years. Ninety per cent of the recorded natural catastrophes were weather-related – however, nearly two-thirds of economic losses and about half the insured losses stemmed from geophysical events, principally from the large earthquakes.
Normally, it is the weather-related natural catastrophes that are the dominant loss drivers. On average over the last three decades, geophysical events accounted for just under 10% of insured losses. The distribution of regional losses in 2011 was also unusual.
The most destructive loss event of the year was the earthquake of 11 March in Tohoku, Japan, when a seaquake with a magnitude of 9.0 occurred 130 km east of the port of Sendai and 370 km north of Tokyo. It was the strongest quake ever recorded in Japan.
The damage from the tremors themselves was relatively moderate thanks to strict building codes. However, the quake triggered a terrible tsunami. The wave devastated the northeast coast of the main island Honshu.
Even without considering the consequences of the nuclear accident, the economic losses caused by the quake and the tsunami came to US$ 210 b – the costliest natural catastrophe of all time. The share of insured losses may amount to as much as US$ 40 billion.