Global insured losses from natural catastrophes and man-made disasters totalled US$37bn in 2015, well below the US$62bn annual average of the past 10 years according to the latest sigma report issued by reinsurance giant Swiss Re.
However, the insured figure only covered about 40% of total global economic losses last year and the remainder were uninsured. Over 26,000 people died in disaster events during 2015.
Further offsetting the apparent improvement is the total of 353 disaster events last year, of which 198 were natural catastrophes – the highest annual total recorded by sigma. Swiss Re also notes that the explosions at the port of Tianjin in China on August 12 were the biggest insured-loss event of 2015 and also the biggest man-made loss event ever in Asia.
Total economic losses from all disasters, including both natural and man-made events, were US$92bn in 2015 against US$113bn in 2014, with both years well below the previous 10-year annual average of US$192bn. Around US$80bn were due to natural catastrophes, with last April’s earthquake in Nepal causing the most damage.
Of the US$37bn global insured losses recorded in 2015, US$28bn were attributed to natural catastrophes – about the same as in 2014. The biggest insured loss of the year – an estimated property loss of US$2.5bn to US$3.5bn – was caused by the Tianjin blast.
Asia suffered the most losses in 2015, with economic losses from all events in the region close to US$38bn. The earthquake in Nepal was the biggest disaster of the year globally, with nearly 9,000 deaths, the largest loss of life in a single event. Total losses from the Nepal quake are estimated at US$6bn, which includes damage reported in India, China and Bangladesh.
Other events causing high losses in Asia included Typhoon Goni in Japan, flooding in southern India and the explosions in Tianjin. Swiss Re’s chief economist, Kurt Karl, said: “The earthquake in Nepal struck close to the capital Kathmandu, causing widespread devastation and losses, which were mostly uninsured. Yet again, tragedy has hit an areas where people are least able to protect themselves.”
A year of contrasts
The relatively low level of losses globally in 2015 compared with the previous 10-year annual average was largely due to another benign hurricane season in the US. Last year was the 10th year in succession that no major hurricane made US landfall.
In North America, the biggest loss came from a mid-February winter storm that caused damage in 17 states, with Massachusetts hit hardest. The combined insured losses of US$2bn were mainly from burst frozen water pipes and ice weight or water damage to property.
Despite a harsh winter in the US, 2015 overall was the hottest year on record. Heatwaves claimed lives around the world, while long stretches of high temperatures and lack of rainfall caused drought and wildfires in many regions. The US had its worst year for wildfires since 1960 because of the hot, dry conditions.
Other countries impacted by wildfires include Indonesia and Australia. In contrast, regions such as India and the UK experienced extreme precipitation events. In India, the city of Chennai was paralysed by flooding after accumulated rainfall of more than 500 mm in November alone.
This was followed by large swathes of the central and northern UK being under water in December due to multiple rainstorms. Preliminary estimates put the insured losses from the UK floods at around US$2bn. Heavy rains and flooding also struck several US states.
Global weather patterns deviated from climate norms in 2015, with El Niño being a contributing factor. While tropical storm activity in the North Atlantic was suppressed, it was a very active season in the Pacific.
A survey conducted by Capital One suggests around five in six plan to implement new treasury management products and services in the coming year.
The European Central Bank will extend its quantitative easing programme for nine months beyond next March, but scale back the level of bond buying from €80bn to €60bn a month.
The agreement, after three years of debate, raise questions on future investment demand, but Fitch Ratings doesnʼt anticipate major market disruption.
The European Commission fined Credit Agricole, HSBC and JPMorgan Chase a total of €485m for manipulating the price of the financial benchmark.