Above-average H1 global insured nat cat losses of $39bn to drive challenging renewals: Aon

Persistent severe convective storm (SCS) activity, predominantly in the US and Europe, has driven an 18% increase in global insured losses from natural disaster events in the first half of 2022 to $39bn, well above the 21st century average. That is according to Aon’s Global Catastrophe Recap First Half of 2022, which says “another challenging round of (re)insurance renewals will be forthcoming”. The report says there were at least nine separate billion-dollar insured events in H1 2022, all but one of which were weather-related. At least 20 events were recorded with at least $500m in insured losses, says Aon, making it the second-highest H1 total this century behind 2020’s 24 events. Aon stresses in the report that “further loss development, at a perhaps significant level, is anticipated in the coming months as the full industry impact from several large events is realised”. The costliest event was prolonged flooding in eastern Australia in February and March. It included some of the heaviest year-to-date rainfall on record for the Sydney metropolitan region, with insured losses of $3.5bn. Windstorm Eunice in western and central Europe saw insured losses of $3.3bn, while the Fukushima earthquake in Japan caused $2.7bn of insured losses. Severe convective storms generated three billion-dollar loss events in the US and two in Europe, with losses driven by significant hailstorms in France. A derecho in southern Ontario and Quebec in late May also generated a billion-dollar SCS loss for the Canadian market, the report states. First-half SCS losses in Europe exceeded $5bn for the second year in a row and is without precedent, the report states. “Insured losses in EMEA were 86% above mean, which was driven by a very costly windstorm season and a relentless thunderstorm activity in May and June,” Aon says. The US saw a notable reduction from last year but H1 insured losses were still close to the 21st century average and made up nearly a half of the global financial impact. Aon says in the report that the first half “saw brand new complexities added to the event response process (including higher replacement costs and reinsurance placements) that were influenced by challenging outside societal and financial factors – notably the war in Ukraine and the highest inflation seen in decades”. It adds: “From a hazard perspective, the fingerprints of climate change continued to become more evident in individual event behaviour and longer-term temperature and precipitation trends in H1 2022. Warmer-than-average temperatures were cited across a broad swathe of the globe, which aided in more unusual weather patterns that were already set in motion by the primary influence of La Niña conditions, which have been ongoing for nearly three consecutive years.” Aon points out that in Q3 2022, often the costliest quarter of the year, and Q4 2022, there will be particular focus on the Atlantic hurricane season and the potential of landfalling storms, together with elevated wildfire activity and the continual threat of severe convective storms. “With inflationary pressure adding greater costs to supply and labour combining with more impactful disasters, it is anticipated that another challenging round of (re)insurance renewals will be forthcoming,” says Aon.

Above-average H1 global insured nat cat losses of $39bn to drive challenging renewals: Aon

Challenging round of (re)insurance renewals expected

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