On March 28, the latest sigma report from the Swiss Re Institute showed that in 2016, total economic losses from natural catastrophes and man-made disasters reached as much as US$175 billion, almost double the 2015 figure (US$94 billion). Global insured losses in 2016 were US$54 billion, up from US$38 billion the previous year—an increase of about 42% year on year.
       It is understood that losses in 2016 (both economic and insured) reached their highest level since 2012, reversing the declining trend of the previous four years. This was because severe disaster events occurred in large numbers across all regions of the world in 2016, including earthquakes, storms, floods and forest fires. Some of these disasters struck regions with high insurance penetration, which drove insured losses up by 42%.

        Data show that 327 disaster events occurred globally in 2016, including 191 natural catastrophes and 136 man-made disasters. The disasters caused US$175 billion in economic losses, almost double those of 2015. As in the previous four years, Asia was the region most severely affected by disasters, with 128 events and economic losses of about US$60 billion. The April earthquake on Japan's Kyushu Island caused the heaviest economic losses, estimated at between US$25 billion and US$30 billion. Globally, the 2016 disasters left about 11,000 people dead or missing, fewer than the more than 26,000 in 2015.
        Dr. Kurt Karl, chief economist of Swiss Re, said: "Economic and insured losses in 2016 were both close to their 10-year averages. Insured losses accounted for roughly 30% of total losses, and some regions suffered smaller relative losses thanks to high insurance penetration. For example, North America accounted for more than half of global insured losses in 2016, mainly because the United States experienced a record number of severe convective storm events, while insurance penetration for storm risk in the U.S. is very high. The costliest event was the hailstorm that struck Texas in April, causing US$3.5 billion in economic losses, of which US$3 billion was insured—so about 86% of the losses were covered. Many households and businesses were insured, so the severe property damage caused by the large hailstones was fully indemnified."

Source: China Business Journal