So far, the economic cost of disasters across the world dropped in 2015 to around $85 billion (78 billion euros) from $113 million last year, according to Swiss Re. The total cost to the insurance industry is likely to be 8.6 percent lower at $32 billion. As you can see there is a big difference between total losses and insured losses. For example, the Nepal earthquake had an economic cost of more than $6 billion, but insurers had to pay out just $160 million. That translates into a lot more human suffering as repair and rebuilding take much longer.
Catastrophes in 2015 proved more deadly than the previous year. Approximately 26,000 people died from disasters this year, more than double the fatalities counted in 2014, with the greatest loss of life caused by the 7.8 magnitude earthquake in Nepal that killed 9,000 and destroyed half a million homes.
Meanwhile record temperatures saw over 5,000 deaths from extreme heat this summer in India, Pakistan, Europe, North Africa and the Middle East, but the most costly single event for the insurance industry was in the United States, where a storm in February resulted in insured losses of more than $2 billion.
However, a mild North Atlantic hurricane season kept the total for global insured losses low, with the estimated total losses of $32 billion down from $35 billion in 2014.Total economic losses from disasters were down by $28 billion from the previous year and, at $85 billion, less than half the annual average for the past decade. “The overall economic impact of these events was devastating in the areas affected,” said Kurt Karl, chief economist at Swiss Re. “Often these areas are the least equipped and have a low level of insurance penetration.”
Among natural catastrophes, the February winter storms in the United States produced the biggest bill for insurers, costing them around $2.7 billion.
While the cost of natural disasters fell, man-made disasters took a higher toll on the industry, with the port explosion in China expected to cost more than any other event this year, with insurers covering more than $2 billion of the damage, but calculations are ongoing.