Natural Disaster Losses Rose to $40 Billion in 2010 on Quakes

By Carolyn Bandel -

The cost to insurers of natural disasters rose 76 percent to $40 billion last year because of higher losses from earthquakes including those that struck Chile and New Zealand, Swiss Reinsurance Co. said.

Earthquakes accounted for about a third of catastrophe losses and will also be “above average” this year, the Zurich- based reinsurer said in an e-mailed statement. Swiss Re estimates total insured claims from the February 2011 temblor in Christchurch, New Zealand, to be between $6 billion and $12 billion, while the March 11 quake that struck Sendai, Japan, is expected to trigger “significant” insured losses.

Insured losses from the 8.8-magnitude quake that struck Chile in February 2010 are estimated at $8 billion, making it the costliest disaster last year, according to the world’s second-biggest reinsurer. September’s earthquake in New Zealand cost $4.45 billion, while storm Xynthia, which also hit in February, may cost insurers $2.75 billion, Swiss Re said.

“2010 was not only characterized by severe earthquakes that ranked among the deadliest, costliest and most powerful in history, but also by a series of extreme weather events, such as major floods,” said Thomas Hess, chief economist of Swiss Re.

Man-made disasters triggered additional losses of about $3 billion, including $1 billion of property claims from the Deepwater Horizon explosion in the Gulf of Mexico, Swiss Re said. Insured losses from natural catastrophes in 2010 were just below the $44 billion reported in 2008, when claims were boosted by hurricanes Ike and Gustav.

Insured losses from the deadliest event last year, the earthquake that killed 222,570 people in Haiti, were minimal, Swiss Re said. The total economic cost of natural disasters more than tripled to $218 billion, while the 304,000 people who lost their lives was the highest number since 1976, it said.

To contact the reporter on this story: Carolyn Bandel in Zurich at cbandel@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net