1,582 captures
25 Dec 2011 - 31 Jul 2015
About this capture
Sign Up
Sunday, February 26, 2012
Arab League summit to be held on schedule — Iraq
Homepage >
Business >
article details
‘2011 will carry highest economic losses in history’
Outlook for European insurers getting worse — EIOPA
Agencies | Dec 24,2011 | 21:31
New vehicles damaged by the March 11 tsunami are placed in a parking lot at Sendai port in Sendai, Miyagi Prefecture, northeastern Japan (AP photo)
GENEVA — Natural and man-made catastrophes cost the world economy $350 billion (270 billion euros) and 30,000 lives this year, reinsurer Swiss Re said in a recent statement.
"2011 will be the year with the highest catastrophe-related economic losses in history, at $350 billion," the company indcated. The figure compares to $226 billion last year.
According to preliminary estimates, total insured losses for the global insurance industry from disasters reached $108 billion in 2011 — more than double the 2010 figure $48 billion and the second highest on record.
"2011 would have been the costliest year ever for the insurance industry if Japan had been more fully insured," said Swiss Re, referring to the earthquake which sparked a tsumani and the Fukushima nuclear disaster in March.
"On top of people losing their loved ones, societies are faced with enormous financial losses that have to be borne by either corporations, relief organisations or governments and, ultimately, taxpayers," said Kurt Karl, Swiss Re’s chief economist.
The Japan quake cost the insurance industry about $35 billion though total losses were nearer $210 billion.
Total losses from the New Zealand quake which hit in February stood at $15 billion but most of this was covered by insurers, Swiss Re indicated.
The most expensive year for insurers was 2005, the year when hurricane Katrina hit the United States, which along with other disasters cost the industry $123 billion.
On top of the quakes in Japan and New Zealand, severe flooding in Thailand and Australia this year triggered more than $10 billion in insurance claims.
Two tornadoes in the US cost almost $14 billion in claims and the industry paid out nearly $5 billion in property damage following Hurricane Irene.
The reinsurer said more than 30,000 people lost their lives because of catastrophes in the first eleven months of the year, most of them in Japan.
Earthquake insurance is still quite low, even in some industrialised countries with high seismic risk, such as Japan, it said.
This year additional claims following the Thailand floods or winter storms which may yet hit Europe could bring it closer to the 2005 record, Swiss Re added.
Separately, the industry's pan-European regulator said last week that
European insurers' prospects deteriorated in the second half of 2011, weighed by a worsening sovereign debt crisis, a slowing economy, and persistently low interest rates.
"Sovereign risk and the lack of a comprehensive political response to the sovereign crisis are the main sources of risk" facing insurers in 2012, the European Insurance and Occupational Pensions Authority (EIOPA) said in a twice-yearly overview of the industry.
"If policy responses remain unconvincing to financial market participants, the European insurance and occupational pension sectors could be severely and adversely affected," it warned.
European insurance stocks have slumped 16 per cent since the start of the year, reflecting fears the sector could be forced to raise capital to make good sharp falls in the value of its holdings of distressed European government debt.
EIOPA also said 8 insurers from a sample of 82 fell below the minimum regulatory capital requirement in a stress test to see how the sector would cope with a prolonged period of low interest rates. EIOPA did not identify the companies involved.
Low interest rates weigh on insurers' investment returns, eroding profits, with companies that provide minimum guaranteed payouts to their customers most severely affected.
EIOPA had already identified the sovereign debt crisis, triggered by fears critically-indebted eurozone countries may be unable to repay what they owe, as the main risk facing the insurance sector in an earlier report in July.
Related Articles
Add your Comments



Email to a friend
Print version
Plain text
Former PM re-ignites protest drive
The presence of former premier Ahmad Obeidat breathed new life into the protest movement on Friday as demonstrators from across the political spectrum gathered in the capital in what marked the largest pro-reform rally in over a month. Full story
Set as homepage
Add to favorites
About usContact usAdvertise
HomeLocalJordan, Ethiopia to sign memo on domestic helper recruitmentPreparations under way for defence exhibitionMasri attends G20 meeting in RiyadhDepartment of Statistics seeks extra funds for 2014 censusDigital media workshop begins todayFormer PM re-ignites protest drive More...RegionDiplomacy hinges on judicial cooperation —Libya Sadr attacks PM Maliki as a ‘dictator’ Clinton in Algeria for talks on reforms, counterterrorism Clinton pledges US help for Tunisia reforms Arab League summit to be held on schedule — Iraq Israel nixes solar energy for Palestinians More...WorldAmerican officers shot dead in Afghan interior ministry American officers shot dead in Afghan interior ministry More...BusinessFinance official signs accord with envoys on managing public expenses EU grant to benefit SPRING programme Gammoh advances ties with Poland, Azerbaijan More...SportsLebanon’s Amiouni wins rally season opener Lebanon’s Amiouni wins rally season opener More...FeaturesIs Google your best doctor? More...LettersWelcome campaignMore...OpinionWhat's On