Global disaster economic costs fall in 2015: Swiss Re

ZURICH, Dec 18, (AFP): The economic cost of disasters across the world dropped in 2015 to around $85 billion (78 billion euros) from $113 million last year, reinsurance company Swiss Re said on Friday.

Insurance companies covered $32 billion of the total, it said in its Sigma study.

The 2015 figure is much below the annual average over the past decade of $192 billion, Swiss Re said.

The cost of natural disasters alone accounted for $74 billion of this year’s total, it said.

The industrial disaster in Tianjin in northeastern China, where massive explosions at a hazardous goods storage firm on August 12 killed 161 people, is estimated to have been the year’s costliest catastrophe, with insurers covering more than $2 billion of the damage, but calculations are ongoing.

Among natural catastrophes, the February winter storms in the United States produced the biggest bill for insurers, costing them around $2.7 billion.

The Nepal earthquake, which killed 9,000 people and destroyed 500,000 homes had an economic cost of more than $6 billion, but insurers had to pay out just $160 million, Swiss Re said.

In this year likely to be the warmest on record, heat waves caused over 5,000 deaths and lack of rainfall also caused considerable destruction by drought and fires.

“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,” he noted.