Global insured losses from natural disasters for the first half were preliminarily estimated at US$21 billion, which is 40 percent lower than the 10-year average of US$35 billion and 19 percent lower than the 18-year average of US$26 billion, according to Impact Forecasting, the catastrophe model development team of Aon’s Reinsurance Solutions business.
The report further revealed that global economic losses from natural disasters during the half were an estimated US$45 billion – 64 percent lower than the 10-year average of US$124 billion and 48 percent lower than the 18-year average of US$87 billion. (Economic losses encompass both insured and uninsured losses).
To better offset any skewed data, a median analysis was conducted to provide a more accurate depiction of disaster losses in recent years. The analysis shows that 2018 H1 natural disaster losses were down 22 percent from the 2000-2017 median on an economic basis (US$58 billion) and just 5 percent lower on an insured loss basis (US$22 billion), said the report titled “Global Catastrophe Recap: First Half of 2018.”
On a regional level, only European, the Middle East and Africa (EMEA) and the Americas had insured losses that were higher than their respective mean and median during the past 18 years, with EMEA elevated due to an active European windstorm season, and the Americas largely due to winter storm and severe weather events in Canada, the report said.
Both Asia Pacific (APAC) and the United States saw lower insured losses, largely the result of a less active severe weather season in the United States and a quieter start to seasonal monsoon flooding across parts of Asia, the Aon report found.
According to the report, there were an estimated 156 natural disaster events in H1 2018, which was above the 18-year average of 142.
While there was no “mega catastrophe” that caused economic damages beyond US$10 billion, there were at least 15 separate billion-dollar events in H1 2018 – all of which were weather-related, except one earthquake event – led by the U.S. (6), EMEA (4), APAC (4), and the Americas (1), the report continued.
There were at least five separate billion-dollar events for the insurance industry in H1 2018 – all of which were weather-related. The billion-dollar events were led by the U.S. (4) and EMEA (1). Three of the events were due to severe weather in the U.S., and the other two included Windstorm Friederike in Western Europe and a powerful U.S. winter storm in early March.
The first six months were marked by many smaller-scale disasters, the report said, with Asia-Pacific (APAC) recording the most disasters in the first six months of the year (55). Europe, Middle East & Africa (EMEA) was second with 44 events, followed by the United States (37) and the Americas (20).
Natural disasters claimed at least 2,153 lives during the first half of 2018, the least since 1986, and significantly below the long-term (1980-2017) average of 36,570 and a median of the same period (7,991). Flooding was the deadliest peril of the first two quarters of 2018, having been responsible for at least 892 deaths.
“The first six months of 2018 featured several large-scale disasters with at least 15 individual billion-dollar economic loss events around the world,” said Steve Bowen, Impact Forecasting director and meteorologist. “However, the resultant losses were largely manageable for the re/insurance industry.”
While first half losses were lower than average, it is important to note that “this does not automatically correlate to a quieter second half,” he added.
“As last year proved on multiple occasions, even one singular event can completely change the trajectory of a year from a humanitarian and financial cost perspective. Identifying and understanding your individual level of risk remains an important asset in helping to mitigate potential impacts given the prospect of future events,” Bowen continued.
Other findings from the report include:
- Two perils recorded above-average economic and insured losses: winter weather (events dominated by heavy snow, ice, frost, extended cold, etc.) and European Windstorm.
- Despite being the costliest peril in H1, severe weather losses (damage resulting from thunderstorms) were 21 percent lower on an economic basis and 13 percent lower on an insured basis when compared to the years since 2000.
- Flooding was also well below normal: down 67 percent on an economic basis and 64 percent on an insured basis. This is primarily due to a more benign start to monsoon season across Asia.
Source: Aon Benfield/Impact Forecasting
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