Total global insured losses from natural catastrophes and man-made disasters in 2016 rose to at least $49 billion in 2016, 32 percent higher than the $37 billion recorded in 2015.
Preliminary estimates from Swiss Re sigma put insured losses from natural catastrophe events at $42 billion in 2016, up from $28 billion in 2015, but slightly below the annual average of the previous 10 years ($46 billion).
Man-made disasters triggered an additional $7 billion in insurance claims in 2016, down from $9 billion the previous year.
Hurricane Matthew and severe storms in the United States generated high losses during the year, Swiss Re noted.
Insured losses from Hurricane Matthew, which caused devastation across the east Caribbean and southeastern U.S. in October, are estimated to be in excess of $4 billion, while economic losses were $8 billion.
Matthew was also the deadliest natural catastrophe of the year globally, claiming up to 733 lives, most of those in Haiti.
A number of severe weather events impacted the U.S. in 2016, including a series of severe hail and thunderstorms.
The costliest was a hailstorm that struck Texas in April, resulting in economic losses of $3.5 billion and insured losses of $3 billion due to heavy damage to property from large hailstones, Swiss Re said.
Swiss Re chief economist Kurt Karl, noted in a press release:
“In this case, because households and businesses were insured, they were much better protected against the financial losses resulting from the storms.”
Total economic losses from natural catastrophes and man-made disasters globally are estimated at $158 billion in 2016, significantly higher than the $94 billion recorded in 2015, due to some large natural catastrophes such as earthquakes and floods.
The gap between total losses and insured losses in 2016 shows that many events took place in areas where insurance coverage was low, Swiss Re said.
Earthquake losses, in particular, underscore the underinsurance problem. For example, government sources put the overall reconstruction cost of an earthquake in August in Italy as high as $5 billion. But insured losses for that event are only a fraction of the total, estimated at $70 million, mainly from commercial assets.
“Society is underinsured against earthquake risk. And the protection gap is a global concern.”
The Kumamoto quakes that struck Japan in April were the costliest disaster event of the year, causing at least $20 billion in economic losses, and $5 billion in insured losses.