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Worldwide natural catastrophes caused about $60 billion in damages last year, but only about 15% of that was insured, a leading reinsurer says.
Insurance density was relatively low in the regions hit hardest by natural catastrophes last year, according to Munich Reinsurance Co.
The Munich, Germany-based reinsurer released some initial figures in advance of its annual survey on global natural catastrophes, which will be available to the public in March.
Munich Re bases its survey on reports of catastrophe losses in the news media, such as wire services, and other publications, which it compiles for analysis each year.
Major catastrophes in 1996 brought total losses for the year to more than $60 billion, a third of 1995's record high $180 billion.
Flooding along the Yangtze River in China was 1996's costliest natural disaster, causing about $26 billion in damage, of which only $400 million was insured. This was significantly lower than the approximately $100 billion in overall losses and $3 billion in insured losses caused by 1995's costliest catastrophe, the Kobe earthquake (BI, Oct. 9, 1995).
In 1996, insured cat losses worldwide amounted to $9 billion compared with $14 billion in 1995 and $17 billion in 1994, Munich Re found.
The costliest insured loss of 1996 was Hurricane Fran, which caused $1.5 billion to $1.6 billion in insured damage and overall damage of $3 billion (BI, Sept. 16, 1996).
Other notable events included a cyclone in Andhra Pradesh, India (BI, Nov. 18), with a total loss of $1.5 billion, but essentially no insured damage, and U.S. winter storms and frost damage, which caused $1.5 billion total damage and an insured loss of $753 million, according to Munich Re.
Munich Re recorded a record-tying 600 major natural catastrophes in 1996, which claimed 11,000 lives. The 600 catastrophes in 1995 claimed 18,000 lives.
Despite a reduction in losses, Munich Re contends that the trend toward more and costlier catastrophes continues. More than five times the number of catastrophes occurred last year than in 1960. Total losses for 1996 were eight times higher and insured losses 15 times higher than inflation-adjusted figures from 1960, Munich Re reported.
Munich Reattributes the trend to increasing concentration of population and value in cities-which are often located in high-risk zones-and in the greater susceptibility of modern industrial societies to disruptions in infrastructure.
Copies of the survey will be available in March by contacting the public relations department of Munich Re A.G., Public Relations Department, Christian Jakobi, Koeniginstr. 107, 80802, Munich, Germany.