Insurers paid out around $19.5 billion for natural disaster claims in the first half of 2017, almost 40 percent less than the year-earlier payout of $32 billion, reinsurer Munich Re said on Tuesday.
In addition, some $21.5 billion of losses were uninsured, down from $79 billion a year earlier.
Thunderstorms in the United States caused the most damage overall, causing economic losses of $18.5 billion, of which $13.5 billion was insured, Munich Re said in a review of industry losses.
“The unusual atmospheric conditions in the USA in the first half of 2017 provided the perfect conditions for powerful supercell thunderstorms, which frequently bring major hailstorms and tornadoes,” Peter Hoeppe, head of Munich Re’s Geo Risks Research, said.
“The number of tornadoes observed in the first quarter of 2017 was twice as high as the average for the last 10 years.”
The single costliest catastrophe was flooding in Peru in February and March, which caused $3.1 billion in economic losses, but only $380 million of that was covered by insurance.
Reinsurers act as a financial backstop to insurance companies, paying a chunk of the big claims for storms or earthquakes in exchange for part of the premium.
Lower claims payouts boost insurance industry profit but have a downside for reinsurers, whoseinsurance company clients often then demand lower prices for reinsurers’ backing.
The review gave no claims figures for Munich Re itself. The reinsurer is due to report second-quarter results on Aug. 9.
(Reporting by Maria Sheahan; editing by Madeline Chambers and Susan Thomas)
[Editor’s note: Munich Re’s report is titled “Natural catastrophe review for the first half of 2017: A series of powerful thunderstorms in the USA causes large losses.” The full report can be downloaded from the company’s website.]
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