2011 will be the year with the highest catastrophe-related economic losses in history, at USD 350 billion2011 would have been the costliest year ever for the insurance industry if Japan had been more fully insured.
According to preliminary estimates from Swiss Re’s sigma team, total insured losses for the global insurance industry from natural catastrophes and man-made disasters reached USD 108 billion in 2011.
2011 is likely to double the figure of USD 48 billion in 2010 in total insured losses
Claims from natural catastrophes alone reached USD 103 billion in 2011, compared to only USD 43 billion last year.
Everest Re Group, Ltd.announced today that it expects to incur net losses of between $100 million and $125 million, after reinstatement premiums and taxes, for claims arising from floods in Thailand. This range of estimates is predicated on an industry loss estimate of between $10 billion and $15 billion.
The Company’s view of its estimate of losses from this event remains preliminary and is subject to considerable uncertainty. Significant rainfall during monsoon season coupled with the aftermath of three typhoons resulted in widespread flooding across many provinces in Thailand. The event spanned several months between the periods of July and December 2011 and has had a significant impact on the Thai economy.
Everest Re Group, expects to incur net losses of between $100 million and $125 million for claims arising from floods in Thailand
While water levels have begun to recede, the nature of this loss and the complexities surrounding the claim adjusting and settlement process lead to uncertainty when estimating the ultimate loss potential from this event. The Company expects it will be several months before relative clarity emerges with respect to its ceding companies’ underlying losses.
Everest also announced an expected increase of $26 million to its net after-tax loss estimate for the earthquake that struck Japan in March. The revision includes higher expected losses from one of the largest cedants in the region, which now exhausts this cover.
“Beyond the financial impact, the events of this year have taken a significant toll on human lives,” stated Joseph V. Taranto, Chairman and Chief Executive Officer. “As an industry, we have borne the insurance risk, which is critical to rebuilding these economies. For 2011, Everest will have incurred significant catastrophe losses but the Company’s balance sheet remains strong and well positioned to capitalize on the opportunities for 2012.”
The widespread floods in Thailand, which reached their highest point in October and November, are the costliest natural catastrophe in the country’s history. The claims burden for Munich Re is expected to be in the range of €500m net before tax. This estimate is still subject to uncertainty, as the water is draining away only very slowly and has still not fully receded in some areas.
The economic losses are huge, since key industries are concentrated in the region north of the capital, Bangkok, and its environs. The consequences of the floods clearly show that prevention measures need to be strengthened in view of the country’s high natural catastrophe exposure.
The Claims Burden For Munich Re Is Expected To Be Around €500m Net Before Tax.
This estimate is still subject to uncertainty, as the water is draining away only very slowly and has still not fully receded in some areas. It therefore remains difficult to estimate losses in the worst affected industrial areas around Bangkok. The consequence of the floods includes not only damage to buildings but also, and more importantly, to the often expensive production facilities housed in them.
Caisse Centrale de Reassurance, a public French reinsurer, said it has stopped writing new businesses in Thailand, New Zealand and Australia to refocus its resources in key areas after a strategic review of its global reinsurance business.
French Reinsurer CCR Withdraws From Thailand, New Zealand And Australia
The reinsurer conducted a strategic review on “global positioning of our open market reinsurance book of business” last August and “it became obvious that we had to refocus CCR’s limited resources on key targets,” said Marc Hannebert, executive vice president of CCR.
“We decided to limit the number of countries where we do business in order to better serve our clients, ensure professional risk management and long-term profitability for the benefit of our shareholders,”
said Hannebert.
About the author
Zhong Li is a tech journalist who covers the latest developments in artificial intelligence, robotics, and biotechnology. Zhong Li is passionate about exploring the ethical and social implications of emerging technologies.
