Insured nat cat losses of around $22bn in H1 well below ten-year average

Insured losses from natural catastrophes totalled $22bn in the first half of 2017, according to Aon Benfield’s Impact Forecasting, with numbers matching Munich Re’s figure of $21.5bn.

According to Aon Benfield, insured losses covered 42% of $53bn total economic losses in the first half of 2017. This is above the average of 32%. Most losses during the period were recorded in the US, a report from the broker says.

Insured losses for the first half of this year were 35% lower than the ten-year average of $34bn, while economic losses were 56% below the ten-year average of $122bn, Aon’s figure show. However, Impact Forecasting says extreme losses in 2011 cloud the true picture of natural disaster figures. Its report’s median analysis reveals that economic losses for the first half of 2017 are 4% above the 2000 to 2016 median average and insured losses are 5% higher.

The number of fatalities from natural disasters during the period was below average, with the lowest number of deaths since 1986 at 2,782.

The costliest insured catastrophe was recorded in the US following a four-day outbreak of severe weather in May that is expected to cost insurers more than $1.8bn, according to Aon Benfield. Other major insured losses included further severe weather outbreaks in the US and Australia’s cyclone Debbie in March at a cost of $1.2bn. In Europe, windstorm Zeus caused insured losses of $340m in France in early March.

Meanwhile, a report from Munich Re says that a series of six severe thunderstorms in the US during the first half of 2017 each caused losses worth billions of dollars. US storms dominated the first half natural catastrophe report in an otherwise below average catastrophe record, the reinsurer adds. US storms accounted for $18.5bn of the total global insured loss figure of $21.5bn for the period, according to the reinsurer.

Economic losses from natural catastrophes for the first half of 2017 totalled $41bn, down from $111bn recorded last year, Munich Re notes. Insurance covered a higher proportion of losses during the first six months of 2017 than last, at just over 50%, it adds.

A single US thunderstorm in early May delivered the highest insured loss during H1 at $1.8bn against economic losses of $2.2bn, Munich Re reveals. Flooding in Peru in February and March recorded the costliest economic loss at $3.1bn against insured losses of $380m.

Munich Re says the US thunderstorms have been attributed to a coastal El Niño off South America alongside a difference in temperature further west that can cause teleconnection events. The coastal El Niño was also blamed for the floods in Peru.

In Europe, economic losses from natural catastrophes totalled $5bn in the first half of this year, with insurance covering a bill of $1.9bn, according to Munich Re. Insured losses were below the average of $4.7bn, it explains.

In Asia and Australia, first-half natural catastrophe losses totalled $9.2bn and insured losses $2.1bn, according to Munich Re. Cyclone Debbie, which hit Australia’s Queensland in late March, was the second costliest natural catastrophe in the first half of 2017, with economic losses of $2.7bn and insured losses of $1.4bn.

Steve Bowen, director and meteorologist at Impact Forecasting, commented: “The financial toll from natural catastrophe events during the first six months of 2017 may not have been historic, but it was enough to lead to challenges for governments and the insurance industry around the world. This was especially true in the United States, after the insurance industry faced its second-costliest first half on record following a relentless six months of hail-driven severe weather damage. In fact, nearly eight out of ten monetary insurance payouts for global disasters were related to the severe convective storm peril.

“Other events – such as cyclone Debbie in Australia, flooding in China and Peru, wildfires in South Africa, and a series of windstorms in Europe – led to notable economic damage costs. As we enter the second half of the year, much of the focus will be on whether an El Niño officially develops. Such an event could have a prominent influence on weather patterns and associated disaster risks.”

The US accounted for 76% of global insured losses during the first half of 2017, according to Impact Forecasting.  But it says there has been an increase in insurance take-up rates in Asia and the Americas, which accounted for 10% and 4% of global insured losses respectively. Insured losses from the EMEA region also accounted for 10% of global insured losses, the firm adds.

Its report records 13 separate billion-dollar events during the first half of 2017 – led by the US at nine, Asia-Pacific at two, Americas at one and EMEA at one.