Swiss Re Sigma Study Unveiled on Catastrophes; Insured Losses Nearly $50 Billion for 2004

More than 300,000 people died in natural and man-made catastrophes in 2004 — the tsunami in the Indian Ocean alone
left 280,000 dead or missing.

According to the latest study by Swiss Re, catastrophes caused insured losses totalling $49 billion worldwide; most of this figure was due to windstorms in the U.S. and Japan.

Swiss Re’s sigma statistics for 2004 identify around 330 natural and
man-made catastrophes worldwide, in which more than 300,000 people lost their lives. By far the largest number of victims was claimed by the tsunami in the Indian Ocean: the authorities in the twelve coastal states affected reported 280,000 people dead or missing.

The sigma study just published puts the total losses directly attributable to these natural and man-made catastrophes at USD 123bn — of this figure, USD 49 billion was covered by property insurance.

For property insurers, 2004 was a record year in terms of claims, mainly due to windstorms: hurricanes in the U.S. and neighboring countries cost insurers around USD 32 billion, typhoons in Japan and neighboring countries a further USD 6 billion.

These record figures were the result of both the unusually high number of storms — 13 hurricanes in the U.S. and 10 typhoons in Japan — and the increasing concentration of insured assets in highly exposed coastal regions.

Climatologists attribute the high windstorm frequency to above-average
sea-surface temperatures and the high year-round average temperatures measured in the last decade. 2004 was the fourth-warmest year around the world since regular temperature measurements started in 1861.

The trend toward increasing concentrations of assets was highlighted by the damage inflicted by the hurricanes in Florida: the enormous losses of USD 19 billionn have to be seen against the background of 70% population growth between 1980 and 2001; in the same period, the state’s gross domestic product increased by 130%. The sigma study also traces the biggest losses since 1970.

The statistics show that, at almost USD 50 billion, insured losses have taken on a new dimension.

Unlike in 1992 and 2001, when one-off events such as hurricane Andrew and the Sept. 11 terrorist attack dominated the claims burden, the record impact in 2004 was due to an aggregation of several costly losses.