Document / Publication
Swiss Reinsurance Company (Swiss Re)
This sigma No 2/2017 document provides a summary of disaster events in 2016. In sigma criteria terms, there were 327 disaster events in 2016, of which 191 were natural catastrophes and 136 were man-made. Total economic losses and global insured losses from natural catastrophes and man-made disasters in 2016 were the highest since 2012, reversing the downtrend of the previous four years.
In terms of devastation wreaked, there were a number of large-scale disasters across the world in 2016, including earthquakes in Japan, Ecuador, Tanzania, Italy and New Zealand. There were also a number of severe floods in the US and across Europe and Asia, and a record high number of weather events in the US. The strongest was Hurricane Matthew, which became the first Category 5 storm to form over the North Atlantic since 2007, and which caused the largest loss of life – more than 700 victims, mostly in Haiti – of a single event in the year. Another expansive, and expensive, disaster was the wildfire that spread through Alberta and Saskatchewan in Canada from May to July.
Global insured losses last year were USD 54 billion, significantly higher than in 2015 and in line with the inflation-adjusted annual average of the previous 10-years (USD 53 billion). Natural catastrophes resulted in claims of USD 46 billion, the same as the 10-year annual average. Insured losses from man-made disasters were USD 8 billion, down from USD 10 billion in 2015.
Insurance covered around 30% of the global economic losses resulting from disaster events in 2016. However, some areas fared much better than others because of higher insurance penetration. For example, North America accounted for more than half the global insured losses. The shortfall in insurance relative to total economic losses from all disasters events – the protection gap – was USD 121 billion in 2016. Under-insurance against catastrophe risk is a reality in both advanced and emerging markets, and there is still large opportunity for the industry to help strengthen worldwide resilience.