Although 2011 was a historically big year for expensive disasters, the level of worldwide catastrophe may not be as unusual as some might think.
A new report from AIR Worldwide, a catastrophe modeling firm, shows that the global insurance industry faces an almost 7 percent chance of experiencing such losses or greater in any given year. That's about a 1-in-15 chance.
Insured losses from global natural disasters totaled $110 billion in 2011, according to Swiss Re, the second-highest figure ever recorded, since the company began publishing the data in 1970.
Natural disasters in 2011 included the Tohoku earthquake in Japan, flooding in Thailand, earthquakes in New Zealand and a record-breaking severe thunderstorm season in the United States, which spawned hundreds of tornadoes, including the twister that devastated Joplin, Mo.
"Many in the industry were surprised at the aggregation of losses in 2011, especially since we didn't have a major U.S. hurricane," Bill Churney, AIR Worldwide senior vice president, said in a press statement.
The catastrophic year prompted industry leaders to question how unusual such losses might be and whether natural disasters could become more severe and frequent.
AIR's report estimates the average annual insured losses from global natural catastrophes are about $59 billion, about $1 billion more than the losses in 2012. The global insurance industry faces a 1 percent chance in any year of losses of over $200 billion.
"Despite the significance of the toll in 2011, insured losses fell well within the range for which global insurers and reinsurers should be prepared," Churney said. "It's our hope that the report will help companies increasingly concerned about escalating levels of loss to better understand and own their risk."