GLOBAL – Natural catastrophes and man-made disasters in 2012 caused economic losses of $186bn (€145.4bn), with approximately 14,000 lives lost, according to the latest sigma study by insurer Swiss Re.

Large-scale weather events in the US pushed the total insured claims for the year to $77bn – the third most expensive year on record.

However, the amount is still significantly lower than 2011, when record earthquakes and flooding in Asia-Pacific caused historic insured losses of more than $126bn, the highest ever recorded.

Nine of the 10 most expensive insured loss events happened in the US in 2012, but the high insurance penetration in North America meant that $65bn, more than half of the region's $119bn in economic losses, were covered by insurance.

Hurricane Sandy was the most expensive event for the year both in terms of economic and insured losses.

The Hurricane caused an estimated total of $70bn in economic losses, making it the second most damaging hurricane on record after Hurricane Katrina in 2005.

Insured losses came to approximately $35bn, out of which $20bn-25bn was covered by the private insurance market.

The remaining insured losses were incurred by the National Flood Insurance Programme.

Losses stemmed from the largest ever wind span recorded for a North Atlantic hurricane, and from the ensuing massive storm surge that caused damaging flooding in a densely populated area on the East Coast of the US.

It also led to the worst power outage caused by a natural catastrophe in the history of the US.

Matthias Weber, Swiss Re's chief underwriting officer, said: "Sandy challenged the industry with its combination of record wind field and storm surge.

"The possibility that such events could increase in frequency and strike densely populated regions such as the northeast US means extreme storm-surges need to be more thoroughly understood."

A simulation exercise presented in the sigma study shows how an increase of sea levels of 10 inches – 0.25 metres – by 2050 will almost double the probability of extreme flood losses occurring.

For the industry, this means that a $20bn insured loss event, now expected once in 250 years, would be expected once in 140 years.  

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