2011: A Record Year for Natural Catastrophes

The world experienced the largest and most costly natural disasters of any year on record in 2011.  From Jan. 1 through the end of June, the cost of natural disasters last year had already exceeded $265 billion dollars, more in six months than the entire year of 2005, the previous record year when Hurricane Katrina hit.  In 2005, the total cost of natural disasters was $220 billion, but it took an entire 12 months to reach that amount.  The largest single loss event in history, the Japanese earthquake and tsunami that took place in March, was $210 billion.  Other events contributing to massive economic losses in 2011 were the 1600 tornadoes that affected the southeast and Midwest last spring, the deadly earthquakes in Christchurch, New Zealand in February and June, and the historic flooding in Australia in January. All of these record events made 2011 the most costly year for natural disasters in recorded history estimated to reach $350 billion.

These major events are beginning to have an impact on insurance companies as many companies will need to increase rates to offset the losses needing to be paid. Business insurance rates have been relatively flat for several years, but as insurance companies use their reserves to pay for these catastrophic losses, and reserves begin to shrink, carriers will have to increase rates to restore them. Small increases have already begun to appear in renewal quotes. 

Now is a good time for business owners to take the time to review policies to ensure they are getting the most “bang for their buck.” Western Growers Insurance Services can assist you with evaluating your coverage and provide suggestions and solutions for any insurance issues you might have. If you are interested in having Western Growers review your insurance situation, please contact us.