Insurers’ losses from natural disasters rose by about 50 percent in 2008, with Caribbean hurricanes Ike and Gustav powering the increase and climate change increasingly a factor, a leading reinsurer said Monday.
Munich Re AG said in an annual review that insured losses came in at $45 billion this year, up from nearly $30 billion in 2007. It said total economic losses, including losses not covered by insurance, leapt to some $200 billion from last year’s $82 billion.
That increase was due in part to the devastating earthquake which hit China’s Sichuan province in May. Munich Re said the quake caused overall losses of $85 billion — by far the year’s biggest — but insured losses of only $300 million.
Munich Re said the year was marked by high losses from weather-related natural disasters, continuing a long-term trend.
“Climate change has already started and is very probably contributing to increasingly frequent weather extremes and ensuing natural catastrophes,” board member Torsten Jeworrek said in a statement.
“These, in turn, generate greater and greater losses because the concentration of values in exposed areas, like regions on the coast, is also increasing further throughout the world.”
The company noted that six named storms — Dolly, Edouard, Fay, Gustav, Hanna and Ike — reached the U.S. coast this year after two years in which the American mainland was largely spared.
The year’s most expensive event for insurers was Hurricane Ike, which hit the Caribbean and the southern United States in September, causing insured losses of $15 billion. In second place was Gustav, which hit shortly before and caused losses of $5 billion.
In both cases, the overall losses were about twice the insured losses.
Munich Re said an unusually severe snow- and ice-laden cold spell in China in January and February, which badly hit roads, railways and electricity supplies, cost insurers $1.6 billion — well short of the overall economic losses, which it estimated at $21.1 billion.
A winter storm that hit central Europe in early March cost insurers some $1.5 billion.
Munich Re said an unusually severe U.S. tornado season, with a total of 1,700 tornadoes, also proved costly. A series of tornadoes that killed 12 people in late May generated insured losses of more than $1.3 billion.
The year’s deadliest disaster was Cyclone Nargis, which devastated coastal areas in Myanmar in early May, killing nearly 85,000 people. Munich Re put overall economic losses at $4 billion, but gave no figure for insured losses in the isolated country.
While they rose sharply for the second consecutive year, this year’s insured losses were still well short of the $99 billion Munich Re recorded in 2005 — when losses were swollen by claims from Hurricane Katrina in New Orleans.
The company said that year also saw a record overall economic loss of some $232 billion, adjusted for inflation.
Munich Re, a reinsurer, offers backup policies to companies writing primary insurance policies. Reinsurance helps spread risk so that the system can handle large losses from natural disasters.