Insured loss estimates from major natural catastrophes totaled US$39.5 billion during 2016, which is the highest level since 2012 when market losses totaled US$60 billion, according to a report published by Willis Re, the reinsurance division of Willis Towers Watson.
The insured losses for 2016 reversed the trend in loss reductions seen from 2011 to 2015, when insured losses fell significantly from US$120 billion to $23.0 billion, said the report, titled “Willis Re Summary of Natural Cat Events 2016,” which reviews the economic and insured losses from the most relevant natural catastrophe events. (The losses detailed in the report do not include man-made disasters.)
“The economic losses have been much higher than the insured losses which show low insurance penetration in the selected regions affected by the catastrophes,” added the report, which confirmed that 10,000 casualties were reported during 2016.
The largest single insured loss came from the Kumamoto earthquake in Japan in April 2016 with losses exceeding US$4.8 billion, the report noted.
Other major events during 2016 included:
- Canada’s Fort McMurray wildfires in May which caused insured losses of around US$3.5 billion
- Hurricane Matthew in early October resulted in the largest single insured loss in the United States at US$2.3 billion
- The combined effects of Windstorms Elvira and Friedrike in Europe in the summer produced losses of approximately US$2.48 billion.
“As our report shows, despite natural catastrophe insured losses falling in the last five years to 2016, they are still significant, and lower profile perils such as the wildfire around Fort McMurray have the potential to cause substantial losses,” said John E. Alarcon, executive director, Catastrophe Analytics, Willis Re International.
“Importantly, our report also highlights that economic losses continue to be higher than insured losses and substantially so in some regions. Clearly the insurance industry has a significant role to play in helping economic recovery by supporting resilient societies and closing the protection gap between insured and total economic loss when natural catastrophes occur,” he added.
The entire Willis Re report can be viewed on the company’s website.
Source: Willis Re
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