U.S., Sandy top 2012 insurance costs

Workers move sand back onto the beach near Workers move sand back onto the beach near a torn-up section of Long Beach's boardwalk months after superstorm Sandy devastated the area. Munich Re estimated insured losses from Sandy at $25 billion and total losses at $50 billion, though it cautioned that the figures are “still subject to considerable uncertainty." (Jan. 2, 2012) Photo Credit: Newsday/Thomas A. Ferrara

advertisement | advertise on newsday

Natural disasters cost insurers $65 billion last year, with the United States accounting for nine-tenths of the bill and superstorm Sandy prompting payouts of $25 billion, a leading insurance company said Thursday.

However, Munich Re AG said that the total insured losses worldwide were down from a record $119 billion in 2011, when devastating earthquakes in Japan and New Zealand cost the industry dear.

The company said total economic costs in 2012 from natural disasters worldwide -- including uninsured losses -- amounted to $160 billion, compared with the previous year's $400 billion.

Sandy, which battered eastern coastline areas at the end of October, killed at least 125 people in the United States and 71 people in the Caribbean. New York, New Jersey and Connecticut were the hardest-hit U.S. states.

Munich Re estimated insured losses from Sandy at $25 billion and total losses at $50 billion, though it cautioned figures are "still subject to considerable uncertainty." That made it the year's most costly disaster, but several other events meant the United States accounted for 90 percent of insured costs and 67 percent of overall losses, the company said.

Over the past decade the well-insured United States on average accounted for 57 percent of insured losses and 32 percent of overall costs every year.

The lengthy drought that seared swaths of the United States last summer produced 2012's second-biggest insurance bill. Munich Re said the insured losses, being picked up by a public-private crop insurance program, totaled between $15 billion and $17 billion -- most of the $20 billion worth of overall crop losses.

advertisement | advertise on newsday

That was the biggest loss in U.S. agricultural insurance history, Munich Re said.

Severe storms and tornadoes in March, late April, June and July completed Munich Re's list of the five costliest disasters for insurers in 2012, each costing $2.5 billion.

Back-to-back earthquakes in northern Italy last May caused total losses of $16 billion, but only one-tenth of that was covered by insurance. Deadly flooding in China in July caused damage worth $8 billion, but only a small fraction of that -- $180 million -- was insured.

You also may be interested in: