Price tag for 2010 disasters: 222 billion dollars

Dec 23, 2010, 10:32 GMT

Washington - The global economic losses from natural catastrophes and man-made disasters equaled 222 billion dollars in 2010, more than triple the 63 billion dollars lost in 2009, according to reinsurance company Swiss Re.

The worldwide insurance industry spent 36 billion dollars on disasters this year, an increase of 34 per cent from 2009.

The death toll was the highest since 1976 - an estimated 260,000 people died in the disasters of 2010, compared to 15,000 in 2009, Swiss Re said.

The bulk of the fatalities occurred in the Haitian earthquake in January, in which more than 222,000 people were killed. On top of that, 15,000 people died in Russia's heat wave, while the summer floods in China and Pakistan led to 6,225 deaths, the company said.

In February, an 8.8-magnitude earthquake killed 800 people in Chile. A powerful 7.1-magnitude earthquake killed 3,000 people and left 100,000 homeless in the Yushu area of China's Qinghai province in April. More than 500 people died in October after a powerful 7.7- magnitude earthquake triggered a tsunami in the Mentawai Islands off the western coast of Sumatra, Indonesia.

In November, Mount Merapi on Java island erupted, killing hundreds.

The humanitarian catastrophes revealed wide differences in how developed insurance systems are in affected countries, and how important insurance is in coping with the financial consequences of disaster, according to Swiss Re.

'While most of the costliest events caused by the earthquakes in Chile and New Zealand and the winter storm in Western Europe were covered by insurance, events like the earthquake in Haiti and floods in Asia were barely insured,' said Thomas Hess, chief economist at Swiss Re.

The most expensive was the February earthquake in Chile, which cost the insurance industry 8 billion dollars, according to preliminary estimates. New Zealand's earthquake left a bill of 2.7 billion dollars for insurers, while winter storm Xynthia in Western Europe led to insured losses of 2.8 billion dollars.

Economic damage is harder to gauge from other events. In April, ash spewed by a volcanic eruption near the Eyjafjallajoekull glacier in Iceland disrupted air traffic across Northern and Western Europe for weeks.

The same month, a BP Plc-leased drilling rig exploded, killing 11 workers and starting the worst oil spill in US history. The flow was only stopped in July and the well sealed in September.

In a new report, the World Bank and United Nations emphasized that cost-effective preventive measures can reduce the toll of natural disasters, which caused 3.3 million deaths from 1970-2008.

They said that by 2100 - even without climate change - damages from weather-related hazards may triple to 185 billion each year. Climate change could add 28 billion to 68 billion dollars from tropical cyclones alone, said the report, titled Natural Hazards, UnNatural Disasters: The Economics of Effective Prevention.

Prevention can be effective even in poor countries, the report says, citing the example of Bangladesh - where early warning systems and advances in weather forecasting have drastically reduced deaths from cyclones each year.