The insurer attributes the high numbers to earthquake-insured claims, which were $47 billion, the highest ever recorded. Japan’s earthquake alone cost the insurance industry an estimated $35 billion. However, because of how under-insured Japan was at the time, the total economic losses—estimated to be at least $210 billion—are likely to be much higher once damage to nuclear facilities and disruption to worldwide supply chains are included. The February earthquake in New Zealand caused economic losses of $15 billion. However, Swiss Re said, thanks to high earthquake insurance penetration rates, particularly in residential properties, the insurance industry will pay most of the losses.
“2011 is going down as another year of very tragic and costly earthquakes,” said Kurt Karl, Swiss Re’s chief economist. “Unfortunately, earthquake insurance coverage is still quite low, even in some industrialized countries with high seismic risk, like Japan. So on top of people losing their loved ones, societies are faced with enormous financial losses that have to be borne by either corporations, relief organizations or governments, and ultimately, taxpayers.”
In addition to the earthquakes in Japan and New Zealand, severe flooding, massive tornado events and Hurricane Irene contributed to the high numbers.
