Global insured losses from natural catastrophes and man-made disasters during the first half of 2018 were $20 billion, down from $30 billion in H1 2017, according to Swiss Re Institute’s latest sigma study.
On the other hand, during the first six months, total global economic losses from disasters were $36 billion, significantly down from $64 billion in H1 2017 and well below the 10-year average of $125 billion, the sigma report said.
Breaking down the figures into natural catastrophe losses versus man-made disasters, the report revealed that global insured losses from natural catastrophes fell to $18 billion from $25 billion the year before, while insured losses from man-made disasters decreased to $2 billion from $5 billion in the first half of 2017.
Of the $36 billion in total global economic losses, natural catastrophes in H1 2018 accounted for the majority, or $34 billion, compared to $58 billion in H1 2017. The remaining $2 billion of losses were caused by man-made disasters.
Nearly 56 percent of all global economic losses were insured, as most disastrous events occurred in areas with high insurance penetration.
Other findings from the report include:
- From an insured loss perspective, Europe’s winter storm Friederike in January was the costliest event in the first half of 2018. The storm caused significant losses in Germany and the Netherlands, although France, Belgium and the U.K. were also affected. Insured losses came to approximately $2.1 billion on economic losses of $2.7 billion.
- A series of winter storms in the U.S., including the “Nor’easter” storm in March, brought heavy snow, ice, freezing rains and flooding from snowmelt and coastal flooding. These storms caused $2.9 billion in insured losses on total economic losses of $4 billion. The Nor’easter was the largest loss for the insurance industry in the U.S. during H1 2018, with claims of $1.6 billion.
- A series of convective storms, including thunderstorms, tornadoes and hailstorms, hit the U.S., Europe and other parts of the world. The costliest event for the insurance industry during the first half was a four-day spring storm that hit the southeastern U.S. states with tornadoes and large hail, resulting in combined insured losses of over $1.1 billion.
- Heatwaves and severe dry weather conditions have triggered major wildfire outbreaks in California and Greece. Widespread drought has affected Europe and southern Australia, which is experiencing its second-driest autumn on record, according to the Australian Bureau of Meteorology. Losses from the droughts and wildfires are still being calculated.
- Around 3,900 people lost their lives or went missing in global disaster events during the first six months of 2018, which was the lowest half-year total in more than 30 years. The H1 2018 total compared to nearly 4,600 in H1 2017.
“We expect to see more extreme weather conditions, such as intense heatwaves and dry spells of the like we’ve seen over the last few weeks. This may well become the new normal,” said Martin Bertogg, head of Catastrophe Perils at Swiss Re.
“According to scientific climate models, temperature and atmospheric humidity will increase in many parts of the world and at the same time also become more volatile.” Bertogg added.
“We will experience more variable rain patterns and severe droughts, and in consequence raging wildfires,” he said. “Accelerating urbanization and the ongoing expansion of dwellings in natural forest areas will considerably exacerbate this loss potential. Society will need to adapt and prepare for these increasing occurrences.”
Source: Swiss Re Institute
*This story appeared previously in our sister publication Insurance Journal.