Preliminary Swiss Re Sigma Estimates of Catastrophe Losses in 2006: Benign Year for Property Insurers

Preliminary Swiss Re Sigma Estimates of Catastrophe Losses in 2006: Benign Year for Property Insurers

December 21, 2006

    ZURICH, Switzerland, Dec. 20 /Xinhua-PRNewswire/ --
According to 
preliminary estimates, natural and man-made catastrophes
triggered total 
economic losses of around USD 40 billion, and cost property
insurers 
worldwide USD 15 billion in 2006.  Earthquakes, cold
spells, windstorms and 
also shipping disasters claimed numerous victims.  In all,
an estimated 
30,000 people lost their lives in catastrophes.

    Insured claims of just about USD 15 billion

    After years of record losses, property insurers appear
to be getting off 
lightly in 2006: catastrophe losses of only USD 15 billion
will allow them to 
replenish their risk capital, depleted by record payments
for hurricane 
damage in 2005 and 2004.  Up to now, only three loss events
in the billion-
dollar range have made themselves felt: two tornados in the
US and a typhoon 
in Japan (cf Table of the most costly insured losses,
below).  Among the last 
20 years, 2006 has produced the third-lowest insured
losses, after 1997 and 
1988.  This is attributable mainly to the quiet hurricane
season in the US 
and surrounding countries.  Unlike in previous years,
Europe has also been 
spared expensive catastrophes up to now; however, the time
for winter storms 
(remember Lothar and Martin in 1999) and floods (for
instance "Christmas 
floods" on the Lower Rhine in 1993) is by no means
over.  And finally, no 
major industrialised regions have been hit by earthquakes,
and very expensive 
man-made disasters -- such as aircraft crashes or
large-scale fires -- have 
been conspicuous by their absence.

    Total economic losses estimated at USD 40 billion

    The geographic distribution of the biggest loss events
is reflected in 
the amounts of both the economic losses and the insured
claims.  As the 
typhoons and earthquakes in 2006 hit mainly newly
industrialising countries 
where insured values are relatively low, the directly
attributable financial 
losses were quite mild, at around USD 40 billion.  Of these
economic losses 
of 40 billion worldwide, only USD 15 billion, or less than
one third, were 
actually covered by insurance.

    Catastrophes claim over 30,000 victims

    sigma recorded nearly 140 natural catastrophes and more
than 200 man-made 
disasters.  The number of victims varies widely from year
to year; in 2006, 
more than 30,000 people lost their lives in natural and
man-made 
catastrophes.  It was earthquakes that caused the most
fatalities: on 27 May, 
an earthquake of magnitude 6.3 almost completely wiped out
the city of Bantul 
on the Indonesian island of Java.  On 17 July, Indonesia
was again shaken by 
an earthquake. This quake, of magnitude 7.7, triggered a
tsunami; quake and 
tsunami together claimed 800 victims. 

    Windstorms and floods also claimed more than 11,500
lives in 2006, two 
catastrophes hitting the Philippines: in February
persistent rainfall 
triggered a mud and rubble slide in the province of Leyte
that buried the 
village of Guinsagon with its approximately 1,000
inhabitants.  In late 
November, heavy rainfall in the wake of typhoon Durian
(also known as Reming) 
sent walls of muddy volcanic ash flowing down the slopes of
Mt Mayon on the 
island of Luzon, burying everything in their path,
including the village of 
Albay. Durian claimed 1,270 victims in the Philippines and
more than 80 in 
Vietnam.

    El Nino inhibits hurricane formation

    The "El Nino" phenomenon, which appears
between September and December, 
is accompanied by higher-than-normal sea surface
temperatures in the tropical 
Pacific basin.  The western equatorial Pacific has been
experiencing an El 
Nino phase with medium-strength typhoon activity since the
autumn of 2006. 
Typhoon Durian for instance wreaked devastation in the
Philippines and 
Vietnam, and Shanshan followed suit in Japan.  In the
tropical Atlantic 
basin, by contrast, the gathering El Nino climate
constellation was already 
mitigating the formation of hurricanes in the summer of
2006.  Consequently, 
the US hurricane season, which lasts from early June to
late November, 
brought only two strong and five medium-strength hurricanes
in 2006.



    Table: The most costly insured events in 2006

    Insured     Date        Event                          
    Country
    losses     (Beginning)                                 
            
                                                           
             
    (in USD bn)                                            
             
     1,720      13.04.2006  Tornado with winds up to 240
km/h,  US     
                             hail                          
              
     1,282      06.04.2006  Series of tornados             
    US     
     1,034      12.09.2006  Typhoon Shanshan               
    Japan  
       920      11.03.2006  Tornados, floods               
    US     
       560      23.08.2006  Storms, hail, floods           
    US     
       500      02.04.2006  Tornados and hail              
    US     



    Table: The deadliest catastrophes in 2006


    Victims     Date         Event                         
    Country 
    (dead and  (Beginning)                                 
                  
     missing)                                              
   
     5,778      27.05.2006   Earthquake (ML 6.3) destroys
the   Indonesia
                              city of Bantul               
                  
     1,350      26.11.2006   Typhoon Durian (Reming), flash
    Philippines
                              rains, mudslide on Mt Mayon  
             
                              volcano
     1,333      15.01.2006   Cold spell; power shortages   
    Eastern 
                                                           
     Europe  
     1,026      02.02.2006   Ferry al-Salam 98 sinks off
the    Egypt   
                              coast                        
              
     1,000      23.04.2006   Passenger train collides with 
    North Korea
                              goods train           
     1,000      12.02.2006   Rain triggers rubble and
mudslide  Philippines



    For the chart of Insured claims 1970-2006, please refer
to 
http://xprnnews.xfn.info/swissre/20061220/claims.htm .



    Definitions and selection criteria for sigma
catastrophe statistics: 
                                                           
             
    Natural catastrophes      Loss events triggered by
natural forces    
    Man-made disasters        Loss events associated with
human activities
    Total losses              Losses with a direct economic
impact       
    Insured propertyclaims    Part of total loss covered by
property     
                               insurance                   
              
                                                           
             
    Minimum selection criteria:                            
             
                                                           
             
    Total losses              USD 80m                      
             
    Or: Insured property      Shipping: USD 16.1m          
             
     claims                   Aviation: USD 32.2m          
             
                              Other: USD 40m               
             
    Or: Casualties            Dead or missing: 20          
             
                              Injured: 50                  
             
                              Homeless: 2000               
             


    Notes to editors

    Swiss Re 

    Swiss Re is the world's leading and most diversified
global reinsurer.  
The company operates through offices in over 30 countries. 
Founded in 
Zurich, Switzerland, in 1863, Swiss Re offers financial
services products 
that enable risk-taking essential to enterprise and
progress.  The company's 
traditional reinsurance products and related services for
property and 
casualty, as well as the life and health business are
complemented by 
insurance-based corporate finance solutions and
supplementary services for 
comprehensive risk management.  Swiss Re is rated "AA
-" by Standard & 
Poor's, "Aa2" by Moody's and "A+" by
A.M. Best.




    For more information, please contact:

     Eileen Lim
     Corporate Communications, Asia
     Tel: [phone]
     Web: http://www.swissre.com 




SOURCE  Swiss Re