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AON Benfield Chairman reviews 2011 catastrophes




Grahame Chilton, Chairman of AON Benfield, this week opened the IIL lecture series in the iconic Lloyd's of London building with a review of the major catastrophic events to have hit the world in 2011.

The lecture looked at the huge financial cost without losing sight of the human side too. Some sobering numbers for you...

. Global economic losses of $350bn
. Insured losses of $110bn
. 30,000 deaths.

Among the major events last year were January's earthquake in Chile, causing economic losses of $30bn and $9bn of insured losses. 

New Zealand was struck by a 6.3 magnitude earthquake in February, causing a $12bn economic loss of which more than 50% were insured losses.   This particular quake occurred on an unexpected fault line, which has rendered 50% of Christchurch uninhabitable. UK-based loss adjusters from companies such as Crawford and Cunningham Lindsey are spending months in New Zealand, to help local professionals work through the huge losses.

Perhaps the most striking images from last year came from March's earthquake and tsunami in Japan. For a country renowned for its earthquake and tsunami defences, it still caused huge damage:

. 20,000 deaths
. Insured losses of $35bn
. The majority of 2011's economic losses

Think also about the damage to supply chains around the world. This terrible event, plus the Thai floods, have severely disrupted global automotive and IT  industries, affecting companies such as Sony and Toyota. Business interruption (BI) is a term used for when companies cannot produce output, and we expect BI and supply chain losses from these events to exceed $15bn and have an impact throughout 2012.

On another point, the 8.9 magnitude quake was so powerful that it shortened the Earth's day (by 1.8 millionths of a second).

On top of this, 2011 saw the USA hit by a record number of tornadoes (875) in just one month.  These caused economic losses of more than $25bn; one positive point from this was that the North American market is the most insured in the world, and over 70% of the losses were insured.

You can download a podcast of Grahame Chilton's lecture via the Insurance Institute of London website.  To access this podcast, you will need to be a CII member.  As well as access to podcasts and slides of previous lectures and sector events, membership will also give you the opportunity to network through your local institute and will provide you with access to our Linked in members group - an excellent way to get yourself known amongst employers.

To apply for CII membership click here.  
 
To read Grahame's exclusive article for the Discover Risk website, click here.
 


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