Munich Re dubs 2011 as the worst loss year ever

Friday, 15 July 2011 00:01 - - {{hitsCtrl.values.hits}}

An exceptional accumulation of very severe natural catastrophes makes 2011 the highest-ever loss year on record, after only the first six months, according to the world’s largest reinsurer, Munich Re.

In a report, the global reinsurance company says that already, economic losses of about US$265 billion up to the end of June easily exceeded the total figure for 2005, previously the costliest year to date at US$220 billion for the year as a whole. In addition, overall insured losses from catastrophes in the first half of this year were US$60 billion, almost five times the first-half average since 2001. Most of the economic losses this year were caused by the magnitude-9.0 earthquake in Japan on 11 March. The disaster is seen as the most expensive natural catastrophe on record in terms of economic losses. It cost about US$210 billion; more than the US$125 billion of economic losses caused by Hurricane Katrina in 2005, and killed at least 15,500 people. However, in terms of insured losses of about US$30 billion, the Japanese earthquake remained below the level of Katrina. First-half losses are generally lower than second-half losses, which are often affected by hurricanes in the North Atlantic and typhoons in the Northwest Pacific. “It is very rare for such an extreme accumulation of natural hazard events to be encountered as in the first half-year,” says Munich Re. Nevertheless, a Munich Re board member, Torsten Jeworrek, says: “We were not surprised by any of the events when seen as single events, since they were within the range of what our risk models led us to expect. The accumulation of so many severe events of this type in such a short period is unusual, but is also considered in our scenario calculations.”