A man observes fires burning in Indonesia. © Press Association Images
A man observes fires burning in Indonesia. © Press Association Images

Indonesian forest fires 'most expensive disaster in 2015'

8 February 2016

The biggest economic disaster in 2015 was the Indonesian forest fires that cost $16.1bn, according to a report.

The fires, caused mainly by illegal slash and burn clearing of forest areas for crops including palm oil, cost the country around 1.9% of its GDP, said Aon Benfield.

In its annual catastrophe report the company said that while 2015 replaced 2014 as the warmest year on record, global economic losses from natural catastrophes stood at $123bn – 30% below the 15-year average of $175bn.

The report said 300 separate global natural disasters occurred in 2015, above the 15-year average of 269 events.

But these events caused insurers to lose of $35bn – 31% below the 15-year average. This was lowest annual insured loss total since 2009.

While the Indonesian forest fires were the most expensive economic disaster, the costliest event for insurers was a February winter storm that hit the Eastern US and resulted in insurance payouts of more than $2.1bn.

The latest blizzards to hit the East Coast of the US are expected to have a “multi-billion dollar” cost.

Stephen Mildenhall, chairman of Aon Analytics, said four of the top five economic losses had occurred outside the U.S.

Yet these had been relatively less expensive for insurers owing to “low insurance penetration in the affected countries”.

The deadliest event of 2015 was the magnitude 7.8 earthquake and aftershock that hit Nepal in April and May.

The earthquake killed more than 9,100 people and cost Nepal and surrounding countries an estimated $8bn in damage and reconstruction.

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