Mark Wilson, Getty Images
People walk across Beach Ave. as floodwaters from Hurricane Sandy rush in on Oct. 29 in Cape May, N.J.
By Doyle Rice, USA TODAY
The U.S. had the world's top two costliest natural disasters in 2012,
according to a report released Thursday by global reinsurance firm Aon
Benfield, based in London.
The largest global disasters of 2012
were Hurricane Sandy (with a cost of $65 billion) and the year-long
Midwest/Plains drought ($35 billion), according to the company's Annual Global Climate and Catastrophe Report, which was prepared by Aon Benfield's Impact Forecasting division.
$35 billion figure is one of the first estimates of the U.S. drought
cost, which "comes from a combination of anticipated losses sustained by
the agricultural sector and other factors such as business
interruption," says Aon Benfield meteorologist and senior scientist
Sandy and the drought accounted for nearly half of
the world's economic losses but, owing to higher levels of insurance
coverage in the U.S., 67% of insured losses globally, the report
states. Total economic losses include the entire cost of an event, while
insured losses are the amount of economic losses that are covered by
insurance, says Bowen.
The U.S. alone accounted for nearly 90% of
all the world's insured losses in 2012. In addition to the drought and
Sandy, several severe weather events and Hurricane Isaac contributed to
The U.S. typically represents 64% of the insured
losses. Why does the U.S. percentage tend to be so high each year? "From
an insurance perspective, the United States has generally been the
dominant region of the world for costliest natural disaster events,"
Bowen says. "The U.S. has a higher level of insurance penetration than
most countries, which in turn leads to more of the economic losses being
Global natural disasters in 2012 combined to cause
economic losses of $200 billion, which is just above the 10- year
average of $187 billion. There were 295 separate events, compared to an
average of 257.
A report in October 2012 from Munich Re, the
world's largest reinsurance firm, said that climate change was driving
the increase in natural disasters since 1980, and predicted that those
influences will continue in years ahead.
However, the Aon Benfield
report states: "Despite growing support for 'the new normal' theory of a
world dominated by rapidly escalating global catastrophe losses, our
study highlights that 2012 returned to a more normal level of losses
after the extreme economic and insured losses of 2011." That was the
year of the terrible earthquake and tsunami in Japan, an earthquake in
New Zealand, and floods and landslides in Thailand.
goes on to say that while nominal catastrophe losses are increasing at
an alarming rate, economic losses as a percent of global GDP - a measure
normalized for inflation and economic development - has remained
relatively stable over the past 30 years.
The deadliest event of
2012 was Super Typhoon Bopha, which left more than 1,900 people dead
after making landfall in the Philippines in December. The number of
human fatalities caused by natural disasters in 2012 was approximately
8,800, with nine of the top 10 events occurring outside of the U.S.