Global reinsurer Swiss Re has released preliminary sigma estimates for the global cost of man-made and natural disasters in 2013. Insurers lost $44 billion this past year in catastrophes that caused global economic losses of $130 billion.
The $44 billion cost to insurers is a major decrease from the $81 billion lost in 2012. In 2013, insured losses totaled at least $38 billion and man-made disasters generated $6 billion. The overall economic loss is also a decrease, down from $196 billion in 2012.
Flooding was a primary factor in insurance claims around the world. In June 2013, floods throughout central and eastern Europe cost $4 billion to insurers and $18 billion overall, making it the second most expensive fresh water flood on sigma records. June flooding in Alberta, Canada totaled $2 billion for insurers, the largest disaster cost ever recorded for a single country.
Other severe weather in Europe contributed to global insurance losses. July 2013 brought Hailstorm Andreas to Germany and France, which cost $4 billion. Windstorms Christian and Xavier later hit central and northern Europe; each cost insurers around $1 billion.
Typhoon Haiyan, which brought heavy rains, storm surges, and record-high winds to the Philippines, claimed 7,000 of the 25,000 lives lost in last year’s disasters. Though this was the highest loss of life from a single event in 2013, insurance costs are expected to be modest as insurance penetration is low in the country.
“In many parts of the world, insurance penetration remains low,” says Kurt Karl, chief economist at Swiss Re. “Together with preventative measures, insurance can lessen the destructive impact and financial burden that large catastrophic events can have on people’s lives.”