Earthquakes and Tsunamis

WORLD

On Saturday April 25, 2015 a 7.8 magnitude earthquake struck Nepal. Thousands of people were killed and many more injured. Aftershocks from the earthquake could persist for years according to geologists. Only a small fraction of the economic losses are covered by insurance. Operating in one of the world’s poorest nations, Nepal’s insurers collected $102 million in premiums for non-life coverages in 2013, according to Axco Insurance Information Services.

The deadliest earthquake in 2014 resulted from a magnitude 6.1 earthquake that hit Wenping in the Yunnan Province of China in August, with 731 people killed or missing. Economic losses totaled $5 billion, according to Swiss Re. There were a total of 15 catastrophic earthquakes in 2014, one of them in the United States, in South Napa, California. Insured losses from earthquakes and tsunamis were $313 million in 2014, higher than the $45 million in insured losses resulting from earthquakes in 2012 but far below 2011’s record $54 billion, according to Swiss Re.

The second largest earthquake in 2014 in terms of total damages was the August 6.0-magnitude quake in South Napa, California, that caused $700 million in total damage and $153 million in insured losses. On March 11, 2011 a devastating tsunami hit the coast of northeast Japan, triggered by a powerful earthquake approximately 80 miles offshore. The quake and tsunami caused $35.7 billion in insured damages, according to Swiss Re. Also, early in 2011 a powerful earthquake struck Christchurch, New Zealand, resulting in $15.3 billion in insured damages. The Japan and New Zealand quakes are among the 10 costliest world earthquakes and tsunamis, based on insured damages, according to Munich Re (see table).

WORLD INSURED CATASTROPHE LOSSES, 2005-2014 (1)

(2014 $ millions)

Year Weather-related natural catastrophes Man-made Earthquakes Total 2005 $123,018 $6,593 $284 $129,895 2006 14,685 5,984 95 20,764 2007 26,840 6,590 640 34,069 2008 46,909 9,094 464 56,467 2009 23,764 4,599 672 29,036 2010 32,212 5,181 14,640 52,032 2011 68,980 6,255 56,429 131,664 2012 72,235 6,030 1,894 80,159 2013 36,531 7,857 46 44,434 2014 27,437 6,958 313 34,708

(1) In order to maintain comparability of the data over the course of time, the minimum threshold for losses was adjusted annually to compensate for inflation in the United Sates. Adjusted to 2014 dollars by Swiss Re.

Source: Swiss Re.