News release
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Preliminary Swiss Re sigma estimates of catastrophe losses in 2006: benign year for property insurers
Contact: Zurich, 20 December 2006 – According to preliminary estimates, natural and man-made catastrophes triggered total economic Aurelia Zanetti, Zurich Telephone +41 43 285 2544 losses of around USD 40 billion, and cost property insurers worldwide USD 15 billion in 2006. Earthquakes, cold spells, Thomas Holzheu, New York windstorms and also shipping disasters claimed numerous Telephone +1 212 317 5190 victims. In all, an estimated 30 000 people lost their lives in Clarence Wong, Hong Kong catastrophes. Telephone +852 2582 5644
Media Relations, Zurich Insured claims of just about USD 15 billion Telephone +41 43 285 7171 After years of record losses, property insurers appear to be getting off
lightly in 2006: catastrophe losses of only USD 15 billion will allow them to replenish their risk capital, depleted by record payments for Swiss Reinsurance Company Mythenquai 50/60 hurricane damage in 2005 and 2004. Up to now, only three loss P.O. Box events in the billion-dollar range have made themselves felt: two CH-8022 Zurich tornados in the US and a typhoon in Japan (cf Table of the most costly Telephone +41 43 285 2121 insured losses, below). Among the last 20 years, 2006 has produced Fax +41 43 285 2999 www.swissre.com the third-lowest insured losses, after 1997 and 1988. This is attributable mainly to the quiet hurricane season in the US and surrounding countries. Unlike in previous years, Europe has also been spared expensive catastrophes up to now; however, the time for winter storms (remember Lothar and Martin in 1999) and floods (for instance “Christmas floods” on the Lower Rhine in 1993) is by no means over. And finally, no major industrialised regions have been hit by earthquakes, and very expensive man-made disasters – such as aircraft crashes or large-scale fires – have been conspicuous by their absence.
Total economic losses estimated at USD 40 billion The geographic distribution of the biggest loss events is reflected in the amounts of both the economic losses and the insured claims. As the typhoons and earthquakes in 2006 hit mainly newly industrialising countries where insured values are relatively low, the directly attributable financial losses were quite mild, at around USD 40 billion. Of these economic losses of 40 billion worldwide only USD 15 billion were actually covered by insurance.
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Catastrophes claim over 30 000 victims sigma recorded nearly 140 natural catastrophes and more than 200 man-made disasters. The number of victims varies widely from year to year; in 2006, more than 30 000 people lost their lives in natural and man-made catastrophes. It was earthquakes that caused the most fatalities: on 27 May, an earthquake of magnitude 6.3 almost completely wiped out the city of Bantul on the Indonesian island of Java. On 17 July, Indonesia was again shaken by an earthquake. This quake, of magnitude 7.7, triggered a tsunami; quake and tsunami together claimed 800 victims.
Windstorms and floods also claimed more than 11 500 lives in 2006, two catastrophes hitting the Philippines: in February persistent rainfall triggered a mud and rubble slide in the province of Leyte that buried the village of Guinsagon with its approximately 1000 inhabitants. In late November, heavy rainfall in the wake of typhoon Durian (also known as Reming) sent walls of muddy volcanic ash flowing down the slopes of Mt Mayon on the island of Luzon, burying everything in their path, including the village of Albay. Durian claimed 1270 victims in the Philippines and more than 80 in Vietnam.
El Niño inhibits hurricane formation The “El Niño“ phenomenon, which appears between September and December, is accompanied by higher-than-normal sea surface temperatures in the tropical Pacific basin. The western equatorial Pacific has been experiencing an El Niño phase with medium-strength typhoon activity since the autumn of 2006. Typhoon Durian for instance wreaked devastation in the Philippines and Vietnam, and Shanshan followed suit in Japan. In the tropical Atlantic basin, by contrast, the gathering El Niño climate constellation was already mitigating the formation of hurricanes in the summer of 2006. Consequently, the US hurricane season, which lasts from early June to late November, brought only two strong and five medium-strength hurricanes in 2006.
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Table: The most costly insured events in 2006
Insured Date Event Country losses (Beginning) (in USD m) 1 720 13.04.2006 Tornado with winds up to 240 km/h, hail US 1 282 06.04.2006 Series of tornados US 1 034 12.09.2006 Typhoon Shanshan Japan 920 11.03.2006 Tornados, floods US 560 23.08.2006 Storms, hail, floods US 500 02.04.2006 Tornados and hail US
Table: The deadliest catastrophes in 2006
Victims Date Event Country (dead and (Beginning) missing) 5 778 27.05.2006 Earthquake (ML 6.3) destroys the city of Indonesia Bantul 1 350 26.11.2006 Typhoon Durian (Reming), flash rains, Philippines mudslide on Mt Mayon volcano 1 333 15.01.2006 Cold spell; power shortages Eastern Europe 1 026 02.02.2006 Ferry al-Salam 98 sinks off the coast Egypt
1 000 23.04.2006 Passenger train collides with goods train North Korea 1 000 12.02.2006 Rain triggers rubble and mudslide Philippines
Insured claims 1970–2006*
in USD bn, Insured losses 1970–2006* at 2006 prices 120
100
80
60
40
20
0 1970 1975 1980 1985 1990 1995 2000 2005
Man-made disasters Natural catastrophes
* 2006: provisional figures New: Natural catastrophe losses also include NFIP flood losses in the US, since 1970 Source: Swiss Re, Preliminary sigma estimates of catastrophe losses in 2006
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Definitions and selection criteria for sigma catastrophe statistics:
Natural catastrophes Loss events triggered by natural forces Man-made disasters Loss events associated with human activities Total losses Losses with a direct economic impact Insured propertyclaims Part of total loss covered by property insurance
Minimum selection criteria:
Total losses USD 80m Or: Insured property claims Shipping: USD 16.1m
Aviation: USD 32.2m
Other: USD 40m
Or: Casualties Dead or missing: 20
Injured: 50
Homeless: 2000
Notes to editors
Swiss Re Swiss Re is the world’s leading and most diversified global reinsurer. The company operates through offices in over 30 countries. Founded in Zurich, Switzerland, in 1863, Swiss Re offers financial services products that enable risk-taking essential to enterprise and progress. The company’s traditional reinsurance products and related services for property and casualty, as well as the life and health business are complemented by insurance-based corporate finance solutions and supplementary services for comprehensive risk management. Swiss Re is rated “AA–” by Standard & Poor’s, “Aa2” by Moody’s and “A+” by A.M. Best.
The comprehensive sigma study “Natural and man-made catastrophes in 2006” will be published in spring 2007. You can already order your copy, remembering to include your full postal address, from: e-mail: [email protected] Zurich: phone + 41 43 285 25 51 fax +41 43 285 4749 New York: phone +1 212 317 5135 fax +1 212 317 5455 Hong Kong: phone +852 25 82 5695 fax +852 25 11 6603
How to obtain a copy of this sigma media release: The English, German and French versions of this sigma news release are available electronically on Swiss Re’s website: www.swissre.com
This media release is also distributed by e-mail. To receive your copy, please contact [email protected]
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