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Disaster claims on insurers drop by a third in first half

Posted On: Aug. 11, 2015 12:00 AM CST

Disaster claims on insurers drop by a third in first half

(Reuters) — Disaster claims on insurers in the first half of the year fell by nearly one-third from the same period last year to $16.5 billion, even though the percentage of losses covered by insurance rose, a study by reinsurer Swiss Re Ltd. showed.

A drop in payouts can lead to calls by insurers for cheaper reinsurance.

Total economic losses from natural catastrophes and man-made disasters totaled $37.4 billion in the first half, down from $59.0 billion a year ago, according to preliminary estimates from the Swiss Re study.

Insurance covered nearly 45% of the losses, up from the average for the past 10 years of 27%.

The death toll from both natural and man-made disasters more than trebled to around 18,000 in the first half of 2015 due to the Nepal earthquakes, a heat wave in India and Pakistan and the drownings of refugees in the Mediterranean, Swiss Re's study estimated.

"The costliest natural catastrophes for the insurance industry resulted from severe winter weather and thunderstorms in the U.S. and Europe," it said.

A February storm in the northeastern United States cost insurers $1.8 billion, the biggest loss from a natural disaster so far this year.

Man-made disasters, such as an oil rig explosion in the Gulf of Mexico in April, triggered an additional $3.6 billion in overall insurance losses in the half year.

The earthquakes that struck Nepal in April and May killed more than 9,000 people and caused more than $5 billion in damage, of which only around $160 million was insured, it said.

The heat wave in May and June, when temperatures reached their highest in a decade, killed more than an estimated 2,500 people India and 1,500 in Pakistan, the company said.

Swiss Re also highlighted the large number of migrants who died trying to reach Europe from conflict zones in northern Africa, often in unseaworthy vessels.

In early August, the Geneva-based International Organization for Migration reported more than 2,000 migrants had died so far this year while trying to cross the Mediterranean.

Swiss Re and other reinsurers, such as Munich Re, help insurance companies cover the cost of major damage claims, such as for hurricanes and earthquakes, in exchange for part of the premiums their insurance company clients pay.