See videos of the flooding disaster aftermath.
The damage caused worldwide by weather catastrophes and the epic tsunami that struck Japan in March totaled a record $380 billion in 2011, with $105 billion of that covered by insurance.
Part of that cost will be showing up locally in higher property insurance premiums, although local claims experience is the main factor when rates go up.
In Nebraska, rates for homeowner's coverage for most insurers are going up between 10 percent and 15 percent, with one company exceeding 25 percent, Nebraska insurance director Bruce Ramge said Tuesday. Damage from hailstorms in the state in 2010 and 2011 drove rates up last year as well.
In Iowa, two-thirds of the companies plan increases of less than 10 percent, according to the Iowa Insurance Division. State Farm, which has the largest market share, is increasing rates by 5.9 percent. Some smaller companies plan larger increases, with one of nearly 25 percent.
Nationally, property insurers are expected to end up with a combined loss for 2011 from their insurance operations of about $40 billion, said Robert P. Hartwig, president of the Insurance Information Institute in New York City. That would be the largest since 2001, when terrorist attacks led to large insurance claims.
Companies try to make up for insurance losses by investing their reserves, but low returns on investments mean that premiums are the insurers' main source of revenue.
Retail insurance companies, which sell policies to consumers and businesses, are paying about 10 percent more for reinsurance from wholesalers such as Munich Reinsurance and Omaha's Berkshire Hathaway Inc., Hartwig said. That cost puts upward pressure on rates paid by homeowners and commercial property owners, he said.
Premiums had been declining since 2003 as insurance companies cut their rates to attract business, Hartwig said. But in 2011, rates began increasing and were up 4.1 percent by last fall as insurers had to raise rates to pay claims and stay solvent.
That could continue in 2012, Hartwig said, in part because the long-term trend in the United States is for more catastrophes and higher claims each year.
In 2011, U.S. insurance claims from natural disasters included a record $25.6 billion from thunderstorm and tornado damage, and the 30-year trend is toward higher claims. As a result, insurance companies may rethink how they calculate the risk of claims from high winds, tornadoes and hail, resulting in higher premiums for consumers and businesses.
According to a recent briefing by experts from Munich Re, the average annual insured damage globally in recent years is up five-fold since the early 1980s, largely because of growing property wealth in the world and the increased use of insurance in developing and midlevel countries.
At the same time, the number of weather-related disasters has been increasing, the German company said, mostly because of the natural variation in weather patterns and possibly in part because of human impact on the global climate.
"The United States had a very active natural catastrophe year in 2011," said Carl Hedde, head of risk strategy for Munich Re's American operation. He counted 171 disasters causing $75 billion in damage, with $35 billion insured. That's the fifth-largest insurance loss in U.S. history and nearly triple the recent $12 billion annual average.
The U.S. fatality count was the highest in 75 years, with 617 deaths from severe thunderstorms and tornadoes, most of them in Joplin, Mo., and Alabama last spring.
Overall, the United States recorded 1,894 tornadoes in 2011, plus 9,417 cases of hail large enough to cause significant damage and 18,685 instances of high winds — a severe weather report total of 29,996. Nearly every city and county east of the Rocky Mountains recorded at least one instance of damaging weather, Hartwig said.
The federal government declared 99 disasters, a record number and three times the annual average.
The tsunami from the earthquake near Japan pushed across the Pacific and caused $100 million in damage to boats along the California and Oregon coasts.
Wildfires in Texas burned an estimated 1,500 homes and cost an estimated $2 billion.
Damage from Virginia's biggest-ever earthquake was not widespread, although it damaged the Washington Monument and the National Cathedral in Washington, D.C. Winter storms in February and October and flooding along the Missouri and Mississippi Rivers and in the Northeast added to the U.S. disaster total for the year.
Worldwide, the 27,000 death total from natural disasters included 16,000 in the Japanese tsunami, said Ernst Rauch, head of Munich Re's corporate climate center. That does not count the tens of thousands of people who are believed to have died from famine during the drought in the Horn of Africa when civil war and political instability blocked assistance to the region.
Hartwig said that despite more than $105 billion in claims globally during 2011, the insurance industry remains "very, very strong."
In the United States, he said, insurers paid out about $1.08 in claims for every $1 in premiums they collected last year. That's about the same as in 2008 but below the recent record of $1.58 in 1992, when Hurricane Andrew devastated portions of southern Florida.
Last year, hurricane damage was relatively light, with only Hurricane Irene and tropical storms Don and Lee making U.S. landfall. Hedde said the last major hurricane to strike the United States was Wilma in 2005, a six-year gap that is "almost unprecedented in the historical record."
Overall, though, said Ernst Rauch, head of Munich Re's corporate climate center, "it was a very extraordinary year."
The Japanese tsunami and New Zealand earthquakes in 2011 caused nearly two-thirds of the global disaster damage, he said, boosting the dollar value of the damage to a record because of the high value of the property that was destroyed. Insurance claims also were high because so much of the property was insured.
The number of natural catastrophes in 2011 — 820 — was about average for the past decade, the report said, counting earthquakes, tsunamis, volcanic eruptions, storms, floods, drought, forest fires and wildfires. Since 2000, five other years have seen more, including 2010.
Some of the events, such as the Japanese tsunami, are likely only once every 1,000 years, said Torsten Jeworrek, who is responsible for Munich Re's global reinsurance business.
Damage from the tsunami was about $210 billion, not counting some of the lasting consequences of damage to the nuclear power plant there. Insured losses from the tsunami were an estimated $40 billion. The New Zealand earthquake caused about $16 billion in damage, of which about $13 billion was insured.
Rauch said the risk of earthquakes has not increased, but the 2011 earthquakes are strong warnings about building decisions and standards in quake-prone areas.
The La Niña natural climate phenomenon probably contributed to heavy rains in Thailand, causing the worst flooding there in about 50 years and killing about 800 people.
Rauch said the disasters also disrupted world trade, including production of automobiles in Japan and computer equipment — particularly hard drives — in Thailand.
The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.
Contact the writer: 402-444-1080, email@example.com, twitter.com/buffettOWH
Iowans assess storm damage
Interstate 680 flood damage