Goodbye 2011, worst year ever for catastrophic economic losses from disasters
Crisis Risk Management
2011 worst year ever for catastrophic economic losses from disasters
“Resilient businesses survive disasters… and, of all the disasters you have seen, the worst will be the one that happens to your company” Jim Satterfield, Firestorm COO
So, how did your business fare in 2011?
As detailed by a preliminary report from reinsurance company Swiss Re,
- 2011 will be the year with the highest catastrophe-related economic losses in history, at USD 350 billion
- 2011 would have been the costliest year ever for the insurance industry if Japan had been more fully insured
The US was the worst hit, as the country posted six of the top 10 most costly insured disasters in 2011.
According to preliminary estimates from Swiss Re’s sigma team, total insured losses for the global insurance industry from natural catastrophes and man-made disasters reached USD 108 billion in 2011. This is more than double the figure of USD 48 billion in 2010. Claims from natural catastrophes alone reached USD 103 billion in 2011, compared to only USD 43 billion last year.
Year of highest ever economic losses
In 2011, total economic losses to society (both insured and uninsured) due to disasters reached an estimated USD 350 billion, compared to USD 226 billion in 2010. The earthquake in Japan accounts for most of this year’s economic losses. More than 30 000 people lost their lives due to catastrophes in the first eleven months of the year, most of them in Japan.
Kurt Karl, Swiss Re’s Chief Economist, says: “2011 is going down as another year of very tragic and costly earthquakes. Unfortunately earthquake insurance coverage is still quite low, even in some industrialised countries with high seismic risk, like Japan. So on top of people losing their loved ones, societies are faced with enormous financial losses that have to be borne by either corporations, relief organisations or governments and, ultimately, taxpayers.”
1 ) Japan’s earthquake, tsunami, $36 BN insured losses
2 ) New Zealand earthquake, $12 BN
3 ) Thailand floods, up to $11 BN
4 ) US tornadoes, Alabama et al, $7.3 BN
5 ) US tornadoes, Missouri et al, $6.7 BN
6 ) Hurricane Irene, $4.9 BN
7 ) Australia floods, $2.3 BN
8 ) US storms, $2 BN
9 ) US storms, $1.5BN
10 ) US storms, $1.4BN
Additionally, an IRIN report states: “the unprecedented flooding in South-East Asian countries this year is estimated to have caused a cumulative production loss of about $6.3 billion or 0.9 percent of the combined gross domestic product [GDP] of Cambodia, Lao People’s Democratic Republic, the Philippines, Thailand and Vietnam,” said a 9 December statement by the UN Economic and Social Commission for Asia and the Pacific (ESCAP), the UN’s regional development arm for the Asia-Pacific region.
“The costliest natural catastrophe [in Southeast Asia] may be the Thailand floods with overall economic losses in the billions,” said Michael Able, a spokesman for Munich Re.
Preparedness and Resiliency are Brand Attributes
At Firestorm, we want 2012 to be a prosperous year for you and your business. We know that by following our Predict. Plan. Perform. model, should disaster strike in whatever form, your ability to continue business operations is greatly enhanced.
Firestorm’s Predict. Plan. Perform. model enables our clients to achieve the best possible outcome in the event of a crisis
We know that consequences can be managed and mitigated. We also know that budget restrictions and available resources can limit the ability to address all exposures and needs. New continuity compliance requirements and regulations are being enforced and must be addressed as well. Most organizations, even ones with detailed business continuity and crisis management plans:
- Do not have the people, resources and training to address all the compliance, planning, exercises, and training needs,
- Have not dealt with major crises,
- Cannot provide senior leadership with timely information and analysis.
PREDICT. PLAN. PERFORM.
As experts in vulnerability analysis, risk mitigation, planning, and crisis management, Firestorm offers organizations of every size immediate access to its expertise and guidance in planning and preparing for any type of emergency along with plan enhancement/development, including business continuity, crisis communications, crisis management, social media risk, security, workplace violence, and communicable illnesses/pandemic.
Firestorm’s guidance allows our clients to complete plans, address emerging issues, and have resources available as needed.
In 2012, jointly we can PREDICT the vulnerability, PLAN the response, and PERFORM when the event occurs.
Talk to us. Let’s make 2012 a year of Preparedness and Resiliency together.