Global insured losses from natural catastrophes were $144 billion in 2017—the highest-ever recorded in a single year, according to the latest sigma study from the Swiss Re Institute.
The biggest losses came from Hurricanes Harvey, Irma and Maria (HIM), which cost insurers $92 billion, with economic damages of $217 billion, said the report, titled “Natural Catastrophes and Man-Made Disasters in 2017: A Year of Record-Breaking Losses.”
As a result, sigma noted, 2017 was the second-costliest North Atlantic hurricane season since 2005.
Record-breaking losses from wildfires across the globe cost insurers $14 billion in 2017, which was the highest total ever reported in a single year, the report continued.
Global economic losses from natural and man-made disasters in 2017 were $337 billion—almost double the losses in 2016 and the second highest on record, the study said. The overall economic loss price tag was composed of nat cats, which cost $330 billion, and man-made disasters, which had a $7 billion price tag, down from $10 billion in 2016.
The report went on to discuss the “protection gap,” or the portion of the overall financial loss not covered by insurance, which totaled $193 billion in 2017.
“The rate of growth of economic losses has outpaced the growth of insured losses over the last 26 years,” said the report. “In terms of 10-year rolling averages, insured losses grew by 5.4 percent between 1991 and 2017, and economic losses by 5.9 percent.”
“A large degree of underinsurance in the U.S. means that many businesses and households there did not have financial cover to help them recover from the hurricanes,” it added. “The protection gap is likewise a severe issue in the many Caribbean islands that HIM also impacted.”
There were 301 catastrophes worldwide in 2017 compared to 329 in 2016, added the report. More than 11,000 people lost their lives or went missing in natural and man-made disasters last year, while millions were left homeless, the report went on to say.
*This story ran previously in our sister publication Insurance Journal.
Source: Swiss Re/sigma