14 January 2016 Insurance

2015 insured losses 31% below average

Insured losses from natural disasters in 2015 hit $35 billion, 31 percent below the 15-year average of $51 billion and the lowest annual insured loss total since 2009.

This is according to Impact Forecasting, Aon Benfield's catastrophe model development team, in its annual global climate and catastrophe report.

The report revealed that 300 separate global natural disasters occurred in 2015, compared to the 15-year average of 269 events, with the costliest event for insurers being a February winter storm that impacted much of the Eastern US and resulted in public and private insurance payouts of more than $2.1 billion.

Global economic losses from natural catastrophes in 2015 amounted to $123 billion. This was 30 percent below the 15-year average of $175 billion.

According to the report, there were 14 multi-billion dollar economic loss events around the world, with the costliest being forest fires that burned out of control in Indonesia.

“At $16.1 billion, The World Bank noted that the economic loss from the fires represented 1.9 percent of the country's GDP,” said Impact Forecasting.

Meanwhile, 2015 replaced 2014 as the warmest year since the recording of global land and ocean temperature began in 1880.

Stephen Mildenhall, chairman of Aon Analytics, said: "Global insured property catastrophes in 2015 accounted for just 28 percent of economic losses, in-line with the 10-year average of 29 percent.

“In many regions, economic catastrophe losses are very material relative to national GDP and yet are insured at much lower levels than in the US and Europe.

“Of our top five economic losses, four occurred outside the US and yet none of these was a top ten insured loss owing to low insurance penetration in the affected countries.”

The top ten insured loss events in 2015 comprised of five US severe thunderstorm outbreaks, one US winter storm, one European windstorm, one Indonesian forest fire, and one United States drought.

Mildenhall added: “With its abundant capital and sophisticated risk management tools, the industry should drive its own growth by better delivering on its core mission of providing critical risk transfer products to enable stable economic development in all regions of the world."

According to the study, the three costliest perils – flood, severe thunderstorm, and wildfire – accounted for 59 percent of all economic losses during the 12 months under review.

Steve Bowen, associate director and meteorologist at Impact Forecasting, added: "While a notable uptick in recorded natural disaster events did not directly translate to greater financial losses in 2015, the year was marked by 31 individual billion-dollar disasters, or 20 percent more than the long-term average. For just the fourth time since 1980, there were more than 30 such events in a year.

“Asia once again incurred the greatest overall economic losses, representing 50 percent of the world total and four of the five costliest events. Despite 32 percent of global economic losses occurring in the United States, it accounted for 60 percent of the insured loss and seven of the top 10 costliest insured events.”

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