FRANKFURT, July 12 (Reuters) - The death toll from natural disasters such as earthquakes, storms and forest fires dropped sharply worldwide in the first six months of 2016 but the bill has risen, the world’s largest reinsurance company Munich Re said on Tuesday.
The economic cost of such events rose about a fifth to $70 billion, Munich Re said but below the average figure for the last 10 years of $92 billion.
The cost of natural disasters reflects the bill for rebuilding houses and infrastructure. The lower death toll is because there have been fewer natural disasters in developing countries, which tend to have the highest casualties.
Insurance covered $27 billion of the half year’s losses compared with a long-term average of $15 billion, Munich Re’s data showed. The figures support the industry’s view that much of the world remains under-insured and that insurance could play a greater role in supporting economic recovery after a disaster.
The premiums for reinsuring natural catastrophe risk tend to fluctuate in line with the payout levels.
The number of people killed totalled 3,800 in the first half of 2016, compared with 21,000 a year ago, with an earthquake in Ecuador killing almost 700, making it the worst in terms of fatalities.
While insurance coverage in developing countries remains at very low levels, the Western world also showed stark differences in buying protection against losses tied to natural disasters.
A quarter of the $25 billion in losses caused by two earthquakes in Japan — the most devastating event in economic terms in the first half — was insured.
In Europe, half of the $6.1 billion in the damage caused by storms is being paid by insurance companies, while three quarters of the $12.3 billion and $3.6 billion bills left by storms in the Texas region as well as from wildfires in Canada were insured.
Reinsurance companies such as MunichRe and rival Swiss Re help insurance companies cover the cost of major damage claims in exchange for part of the premiums their insurance company clients pay. (Reporting by Arno Schuetze; Editing by Keith Weir)