Insurance Covered Half of U.S. Disaster Costs in 2012: Swiss Re

Natural catastrophes and man-made disasters caused $186 billion in economic losses globally in 2012 and took approximately 14,000 lives, according to global insurer Swiss Re’s latest sigma study.

The United States bore the brunt, about $119 billion of that total hit, and private and public insurance picked up the tab for more than half of the damage.

Large-scale weather events in the United States pushed the global total of insured weather-related claims for the year to $77 billion, the third most expensive on record. The amount is significantly lower than 2011, when record earthquakes and flooding in the Asia Pacific caused historic insured losses of more than $126 billion, the highest ever recorded, Swiss Re reported.

Nine of the 10 most expensive insured loss events happened in the United States in 2012. The high insurance penetration in North America meant that $65 billion, over half of the $119 billion in economic losses in the region, were covered by private and public insurance.

Hurricane Sandy was the most expensive event for the year in terms of economic and insured losses. The hurricane caused an estimated total of $70 billion in economic losses, making it the second-most damaging hurricane on record after Katrina in 2005. Insured losses were approximately $35 billion, out of which $20 to $25 billion were covered by the private insurance market. The remaining insured losses were incurred by the National Flood Insurance Program.

The 2012 drought was the highest recorded loss in agriculture insurance, according to Swiss Re.