According to a report published Wednesday by the Munich-based insurance company Munich Re, the world faced total losses of $380 billion, over $150 billion more than 2005, the previous record year.
But 2011 was not merely a year of financial losses, as over 27,000 lives were claimed by natural catastrophes.
The figures reveal that two-thirds of the final figure stem from earthquakes early in the year in Japan and New Zealand.
Normally, geophysical events like this account for just 10 percent of losses related to natural disasters.
“Thankfully a sequence of severe natural catastrophes like last year's is a very rare occurrence,” said Torsten Jeworrek, Munich Re board member. “We had to contend with events which occur once every 1,000 years or more.”
The largest single contributor to the year's losses was the earthquake and tsunami near the port of Sendai, 370 kilometres north of Tokyo in March.
Over 16,000 people were killed in what was believed to be the most powerful earthquake in Japan's history, causing waves of up to 40 metres to sweep across huge areas.
The quake measured 9.0 on the Richter scale and caused total losses of around $210 billion, mainly caused by the tsunami and the subsequent nuclear disaster at the Fukushima power plant. Japan has strict building rules that minimize earthquake damage to buildings.
Earlier in the year, a string of powerful earthquakes hit Christchurch, New Zealand, destroying many of the region's old buildings. Many residential areas remain uninhabitable.
One earthquake alone, which measured 6.3 on the Richter scale, caused $16 billion worth of damage.
Professor Peter Höppe, Head of Munich Re's Geo Risks Research unit said, “Even if it seems hard to believe given recent events, the probability of earthquakes has not increased.”
But he added, “These severe earthquakes are timely reminders that the decisions on where to build towns need careful consideration, especially where certain buildings are concerned, above all nuclear power plants.”
Aside from the geophysical events of 2011, heavy rainfall caused the worst flooding for 50 years in Thailand. Over 800 people were killed and the losses amounted to tens of billions of dollars, as well as reducing the world's supply of computer hard drive components by 25 percent.
In the USA, storms amassed billions of dollars worth of damage, with tornadoes alone racking up $46 billion in losses. Tropical cyclones, the number of which was far above the US average, were less damaging, as few hit the American mainland.
One that did, however, was Tropical Storm Irene, which caused $16 billion in damages, said Munich Re in their study.
Of the $380 billion total, Munich Re's study reveals that only $105 billion was insured, meaning it can be reclaimed.
“It is the insurance industry's task to cover extreme losses, in order to help society cope with natural disaster,” said Jeworrek.