It is not just the financial crisis that is proving costly for economies, but natural and man-made disasters are also eroding global wealth, resulting in an economic loss of $269 billion worldwide in 2008.
“... The total impact on the economy caused by natural and man-made catastrophes around the world added up to $269 billion,” the world’s leading reinsurer Swiss Re has said.
According to its report titled ‘Natural catastrophes and man-made disasters in 2008’, there were 137 natural and 174 man-made calamities in 2008.
Nearly half of the worldwide financial loss of $269 billion, was due to the earthquake that struck China in May. The earthquake is estimated to have resulted in a loss of $124 billion, Swiss Re said.
Noting that 2008 was one of the costliest catastrophe years in history, the report said that Asia suffered the most in terms of the number of lives lost, while the US was worst hit in regard to insured property losses.
Last year, the report said insurers worldwide shelled out $52.5 billion as compensation for property losses due to natural and man-made disasters.
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“Insurers across the sector paid out $52.5 billion to compensate for property claims...," it pointed out.
Out of the total cost incurred by property insurers, over $44.7 billion were related to natural catastrophes and about $7.8 billion were due to man-made disasters.
However, the report said only about 20 per cent of the property losses were eligible for insurance reimbursement.
In the case of India, disasters in India caused death of around 2,300 people and insurance claims of $442 million, the report stated.
“The extent of the damage once again revealed the need to introduce improved prevention and post disaster management practises”.
“It also reaffirmed that the lack of insurance cover, particularly in the emerging markets, continues to leave many people vulnerable after a catastrophic event occurs,” the report noted.
Swiss Re said out of the total 2,40,500 people who were victims to catastrophes, 98 per cent were from Asia alone.
It added that insurance protection in Asia against the risk of catastrophic losses remained at very low levels, leading to individuals, corporations and governments bearing the uninsured losses.
“In Asia, more than 2,35,000 people died or disappeared after the region was hit by several catastrophes. Storms, floods and landslides caused the most fatalities (1,43,000), with tropical cyclone Nargis alone claiming 1,38,000 victims,” it added.