Half-year insured nat cat losses below ten-year average at about $30bn but above longer-term norm

Natural disasters cost the insurance industry an estimated $30bn in the first half of 2020, 21% lower than the ten-year average but 8% above the average since the turn of the century, according to Aon’s Impact Forecasting. Figures from Munich Re place insured losses from natural disasters at $27bn for H1, above its 30-year $20bn average. Aon’s half-year insured loss figure is down from $32bn in 2019. Total economic losses were $75bn, some 25% lower than the average between 2000 and 2019. Impact Forecasting recorded 207 natural disasters in the first half of 2020, with 20 billion-dollar economic events, ten of which were in the US. Some 77% of insured losses were caused by severe weather events and 69% of losses were in the US. Windstorm Ciara/Sabine was the costliest insured loss in Europe during the period, with claims of about $2bn. Hailstorms in Australia at the beginning of the year cost $1.1bn, according to Aon. All other insured losses in excess of $1bn were caused by seven severe convective storm events in the US. The costliest event in April notched up claims totalling $2.7bn. Cyclone Amphan in India in May was the costliest economic event of H1 2020, causing an estimated $15bn in damages, Aon’s figures show. Steve Bowen, director and meteorologist at Impact Forecasting, said: “The first half of 2020 was challenging on a number of fronts, given the ongoing effects of Covid-19 and a series of impactful weather and climate-related events around the world. Much of the natural disaster impact came via the severe convective storm peril. “A record ten individual thunderstorm-related events caused more than $1bn in economic losses in the US alone during the first six months of the year; while Australia and Canada each dealt with severe hailstorms that prompted billion-dollar damage bills,” he added. Munich Re said North America accounted for 82% of insured natural disaster losses in the first half of the year, up from an average of 60%, while Europe and Asia-Pacific recorded lower losses than average. According to the reinsurer’s figures, severe thunderstorms in North America cost $20bn in insured losses during H1, with eight storms exceeding $1bn. Munich Re said bushfires in Australia recorded unprecedented losses and cost insurers $1.6bn during the 2019/2020 season. It warned that climate conditions, in particular La Niña, and are set for an active hurricane season in the north Atlantic during the second half of 2020. It added that California faces further threats of wildfire, which could be “more extreme” this year if La Niña creates dry conditions in autumn. Ernst Rauch, chief climate and geo scientist at Munich Re, said: “While we cannot attribute individual events to climate change, the trend in our data clearly shows that losses from severe thunderstorms, particularly in North America, are on the rise, largely as a result of population and exposure growth in suburban and exurban regions, as well as increased property values and poor construction practices. Even in these times of global pandemic, we should not forget that climate change is also a risk with systemic elements.” Torsten Jeworrek, member of the board of management at Munich Re, said climate change is likely to increase thunderstorm risk in North America over the long term. “The world finally needs to take vigorous action to reduce greenhouse gas emissions in order to prevent losses and ensure we are not taken unawares by the consequences of climate change, as we were with the current coronavirus pandemic,” he said.

Half-year insured nat cat losses below ten-year average at about $30bn but above longer-term norm

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