Disasters cost $33-B global economic losses in H1

MANILA, Philippines - Total economic losses from natural catastrophes worldwide amounted to $33 billion in the first half of the year, according to a study made by Swiss Re, one of the world’s leading insurance and reinsurance institutions.

Overall insured losses hit $16.5 billion, of which $12.9 billion came from natural disasters and the rest from man-made disasters.

The costliest natural catastrophes for the world’s insurance industry resulted from severe winter weather and thunderstorms in the US and Europe. In February, a winter storm in the northeastern US caused insurance losses of $1.8 billion, the highest loss of any event so far this year.

In the Philippines, extreme heat and drought has resulted in extreme damage to agricultural crops. While the economic losses have yet to be computed, it had resulted in slowing economic growth in the first semester of 2015.

The report said first semester economic losses this year was below the $54 billion in the same period in 2014 and also the average first-half year loss of $99 billion over the previous 10 years.

Insured losses this year were lower than the $20 billion in 2014 and again below the average first-half year loss ($25 billion) of the previous 10 years.

The global insurance industry covered nearly 45 percent ($16.5 billion) of these losses, which is higher than the previous 10-year average cover of 27 percent.

Earthquakes and soaring temperatures claim over 18,000 people in the same period.

There were more than 9,000 fatalities in the earthquakes that struck Nepal in close succession in April and May, the largest loss of life due to any natural catastrophes so far this year. The quakes also left many people homeless.

The economic losses in Nepal are estimated to be more than $5 billion. Of those, only around $160 million were insured losses.

Swiss Re chief economist Kurt Karl said the tragic events in Nepal is a reminder of the utility of insurance.

“Insurance cover does not lessen the emotional trauma that natural catastrophes inflict, but it can help people better manage the financial fallout from disasters so they can start to rebuild their lives,” Karl said in the report.

In the same region, India and Pakistan were hit by a severe heat wave in May and June. Temperatures soared to 48°C, the highest recorded since 1995.

It is estimated that more than 2,500 people died in India and 1,500 in Pakistan as a result of the extreme heat.

Another factor in the high number of victims of disaster events in the first half of this year is the number of migrants who have died attempting to reach Europe from conflict zones in northern Africa, often in unseaworthy vessels. In search of a better life, sadly these people have instead lost their lives as the boats capsized while carrying them across the Mediterranean.

In 2014 report, total insured losses for the global insurance industry from natural catastrophes and man-made disasters amounted to $45 billion.

However, economic losses were reported in the vicinity of $140 billion last year.