Calculating the cost of catastrophes
BASEERA, PAKISTAN - AUGUST 26: Flood victims head back home on a flooded road as the water level goes down August 26, 2010 in Baseera, Punjab, Pakistan. Pakistan is suffering from the worst flooding in 80 years, with government officials claiming as many as 20 million people have been affected by the flooding with 15 million seriously affected. The U.N has described the disaster as unprecedented, with over a third of the country under water, and the country's agricultural heartland has been devastated as rice, corn and wheat crops have been destroyed by the floods.
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STEVE CHIOTAKIS: If you're keeping score, it's been a tough year for people who've suffered at the hands of catastrophes. There was the horrific earthquake in Haiti, devastating floods in Pakistan, and the oil spill in our own backyard, in the Gulf of Mexico. Added to all the other disasters on the planet, a new study says the price tag is triple what it was last year.
From London, Christopher Werth explains.
CHRISTOPHER WERTH: Globally, that's $220 billion in economic losses from major catastrophes. Thomas Hess is with Swiss Re, the insurer that issued the report. However, the cost to the global insurance industry is up only about a third to $36 billion. He says that discrepancy has to do with the fact that the places that saw the worst natural disasters this year, notably Haiti and Pakistan, lack viable insurance.
THOMAS HESS: So a lot has to be done in these markets to make these things insurable and also to facilitate that people can afford such insurance.
He says if people in those countries had had insurance that could have helped prevent further losses and could have saved lives, as insurers typically push for making buildings safer. Indeed, the study shows the human cost is even greater this year. Severe catastrophes claimed the lives of nearly 260,000 people, compared to a world total of 15,000 just last year.
In London, I'm Christopher Werth for Marketplace.