Catastrophic losses: 2011 most expensive
Last week Zurich Re(insurance) released its annual survey of catastrophes. Given events in Japan and Thailand, none of us are surprised it was a bad year. In terms of total economic loss (above) it was the worst year on record. The total insured loss was a bit less than 2005 when hurricane’s Katrina, Rita, and Wilma hit the United States. Compared to most industrial and post-industrial nations, Japan has a low rate of insurance penetration.
Neither economic nor insured losses capture the full range of catastrophic events. The continuing drought and famine in the Horn of Africa is not featured in the report. Four other examples that are under represented by financial data:
The report includes a special section on the Thai flooding. According to the report,
The size of the Thailand flood loss came as a shock to the insurance industry. Although Thailand had been known for being prone to flooding, less known was the large amount of exposure that had built up in Thailand in recent years, most of which originated from foreign companies that had diverted their manufacturing operations there…
The Thailand flood is a textbook example of how a natural catastrophe can cause extreme property loss accumulations… a large affected area, high intensities, long duration, high concentration of property values, high insurance penetration, high vulnerability of insured goods, and insufficient protection and preparedness.
Concentrations of population, wealth, and the systems on which population and wealth depend are increasingly fat targets for natural, accidental, and intentional hazards.
