Man-made and natural catastrophes claimed more than 33,000 lives worldwide in 2001, causing direct financial loss of more than US$115 billion, according to preliminary estimates from insurance giant, SwissRe.

Of that US$115 billion, more than US$32 billion will be borne by the insurance industry. The insured property and business interruption losses alone caused by the terrorist attacks of September 11 are put at US$19 billion. These figures do not include the indirect negative impact on the equity markets and the global economy. The estimated losses are almost triple the annual average in the 1990s.

More than 33,000 people perished in 2001 as a result of a large loss event. The estimated death toll for the earthquake in Gujarat (India) alone was 15,000, and nearly 3,300 for the terrorist attack on the World Trade Center. It caused an estimated US$90 billion in damage, the biggest economic loss by far, but billion-dollar losses were also caused by the Code Red computer worm and the explosion of a drilling platform off the coast of Brazil.

As for natural catastrophes, Storm Allison in the U.S. and earthquakes in India, El Salvador caused economic losses that ran into the billions.

Two natural catastrophes in the U.S exceeded the billion-dollar loss threshold: Storm Allison (US$2.5 billion) and an April storm causing flooding, hail and wind (insured damage of US$1.9 billion).

In comparison, the most expensive natural catastrophe to date was Hurricane Andrew, which cost the insurance industry US$20.2 billion in 1992. The trend towards higher losses continues given the risk factors of higher population densities, and higher concentrations of insured values, especially in endangered areas. Following the large losses incurred in 2001, the risk of terrorism must increasingly be factored into the equation.