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Swiss Re cites US weather for big insurance losses

Wednesday - 3/27/2013, 1:48pm  ET

In this photo released by China's Xinhua News Agency, villagers repair the roof of a house at Shuangxi Village of Shuangxi Township in Jing'an County, east China's Jiangxi Province, Saturday, March 23, 2013. Hailstorms that hit southern China this week have killed a dozen of people, injured hundreds more and caused millions of dollars in damage. (AP Photo/Xinhua, Xu Zhongting) NO SALES

GENEVA (AP) -- Insurance claims paid out because of natural catastrophes and man-made disasters in 2012 totaled $77 billion globally, making it the third costliest year on record, a leading Swiss firm said Wednesday.

The tab covered by insurance companies represents only about two-fifths of the $186 billion in economic losses, not to mention the 14,000 lives lost, from the more than 300 catastrophes and disasters around the globe last year, according to Zurich-based Swiss Reinsurance Company Ltd., known as Swiss Re.

But the vast majority of that damage, it said, was because of "large-scale weather events" in the U.S. such as Hurricane Sandy that alone accounted for $70 billion in economic losses, of which $35 billion were insured losses -- nearly half the total in last year's paid claims worldwide.

The insured payouts of $77 billion represent a big drop from 2011, which Swiss Re called the costliest year on record because of earthquakes and flooding in Asia Pacific -- and might have been far higher had more people been able to afford insurance.

"However, large parts of the globe that are prone to weather extremes were not able to rely on financial relief due to low insurance penetration," Swiss Re chief economist Kurt Karl said.

By contrast, due to high amount of coverage in North America, about $65 billion of the region's $119 billion in economic losses were covered by insurance.

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