Underinsurance remains a key issue, according to Swiss Re report

Money, dollars, cash

The damage bill from natural and man-made disasters this year will tally to at least $158bn, up from $94bn in 2015.

According to preliminary estimates from Swiss Re, the economic losses will be higher this year owing to larger natural catastrophe events, such as earthquakes and floods, than the year prior.

Insured losses were also higher in 2016 at about $49bn, compared to $37bn in 2015.

But the gap between total losses and insured losses this year shows that many events took place in areas where insurance coverage was low.

Swiss Re chief economist Kurt Karl said that earthquake risk was a key area of underinsurance.

“The protection gap is a global concern. For example, Italy is the eighth largest economy in the world, yet only 1% of homes in Italy are insured against earthquake risk. Most of the reconstruction cost burden of this year’s quakes there will fall on households and society at large.”

There were a number of major earthquakes across the world in 2016, including in Taiwan, Japan, Ecuador, Italy and New Zealand.

Among the largest was the 7.0-magnitude quake that struck the Kumamoto prefecture in Japan on 16 April, part of a series of strong shocks and aftershocks in the region.

The quakes resulted in extensive structural damage, fires and collapsed buildings, and claimed 137 lives.

The total economic cost was at least $20bn, of which $5bn was insured. The Kumamoto quakes were the costliest disaster event globally of the year, according to Swiss Re.