After last year’s record catastrophe insured losses of more than $100bn, the benign conditions of 2005 look like costing the (re)insurance industry just $15bn in losses from natural and man-made catastrophes, according to preliminary figures from Swiss Re.
The figure is the third lowest in the last twenty years, after 1997 and 1998, and includes only three loss events in the billion-dollar range.
Two US tornadoes in April cost insurers $1.72bn and $1.28bn respectively, while September’s Typhoon Shanshan in Japan cost the industry an estimated $1.03bn.
The main driver of the relatively low loss burden was the absence of significant hurricane activity in the US and Caribbean, contrary to forecasts at the start of a year that followed a record 2005 season costing the industry more than $65bn.
Swiss Re noted that the “El Nino” phenomenon had contributed to lower formation of hurricanes in the tropical Atlantic basin, although the resulting higher-than-normal sea surface temperatures in the tropical Pacific basin had led to “medium-strength” typhoon activity since autumn 2006.
There has also been an absence of expensive catastrophes in Europe in the year-to-date – although Swiss Re cautioned that the time for winter storms, such as Lothar and Martin that hit in 1999, and flooding, is “by no means over”.
