The costliest catastrophes in history resulted in economic and insured losses of several billion dollars. These events had a strong negative impact on the bottom lines of AIG (AIG), ACE (ACE), Travelers (TRV), Chubb (CB), and other insurers held by the Financial Select Sector SPDR ETF (XLF) and the iShares US Financial ETF (IYF).
The chart above shows the major catastrophes of recent decades and the insured losses due to these catastrophes.
In terms of insured losses, Hurricane Katrina was the costliest natural catastrophe in history. The storm caused insured losses of $62 billion and economic losses that were double that amount.
The 2011 earthquake and tsunami in Japan was the second most costly event when it comes to insured losses. In addition to incurring insured losses of $40 billion, the catastrophe caused overall losses of over $200 billion—the highest in history.
Hurricanes Sandy, Ike, and Andrew remain near the top of the list of costliest catastrophes with insured losses of roughly $30 billion, $19 billion, and $17 billion, respectively.
The costliest man-made event in terms of insured losses was the September 2001 terror attack on the World Trade Center (or WTC), the Pentagon, and other buildings. Insured losses ran above $25 billion.