2017 becomes costliest nat cat year on record
Weather disasters in 2017 added up to $344 billion in global economic losses, according to the latest Aon catastrophe report.
The report reveals that there were 330 natural catastrophe events in 2017 that generated economic losses of $353 billion – of which 97 percent ($344 billion) were due to weather-related events, including hurricanes Harvey, Irma and Maria in the US and Caribbean, plus typhoon Hato in China and cyclone Debbie in Australia. The 2017 natural catastrophe losses were 93 percent higher versus the 2000-2016 average.
Insured losses to the private sector and government-sponsored programmes were among the costliest ever incurred, reaching $134 billion in 2017 – just behind the record $137 billion in 2011. The 2017 insured losses were 139 percent higher than previous year’s $56 billion, primarily due to high insurance penetration in the US that suffered a very active Atlantic hurricane season, severe weather events and wildfires.
“While 2017 was an expensive year for the insurance industry, the reinsurance market had an estimated $600 billion in available capital to withstand the high volume of payouts,” said Eric Andersen, CEO of Aon Benfield. “Most critically, the US weather and wildfire events in particular have demonstrated the value of reinsurance, with claims being paid in an average of eight days to augment the recovery process.”
Aon’s ‘Weather, Climate & Catastrophe Insight: 2017 Annual Report’ also shows that 36 percent ($80 billion) of economic damage from Hurricanes Harvey, Irma and Maria were insured.
Wildfires caused $14 billion of insurance losses in 2017 – the highest on record for the peril.
Overall, 10,000 human fatalities were caused by natural disasters, with the deadliest event being a massive landslide event in Sierra Leone when more than 1,100 people lost their lives.
The report noted that 2017 was the third warmest year on record since 1880 for combined land and ocean temperatures.
Steve Bowen, Impact Forecasting director and meteorologist, said: “The high cost of disasters in 2017 served as a reminder that we continue to face increasing levels of risk as more people and exposures are located in areas that are particularly vulnerable to major, naturally occurring events. As weather scenarios grow more volatile in their size and potential impact, it becomes more imperative than ever to identify ways to increase awareness, improve communication, and lower the insurance protection gap. We know natural disasters are going to occur. The question is how prepared are we going to be when the next one
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