Insured nat cat losses high in 2020—but could have been worse: Willis Re
Global insured losses from major natural catastrophes in 2020 reached nearly $78 billion, the fourth largest since 2011 and about 17 percent higher than the ten-year average of $66.5 billion, according to a new report by Willis Re.
The report highlighted that the total losses surged despite the "limited impact" of North Atlantic hurricanes during the most active season. Instead, they arose from a series of small and medium-sized events.
Analysts at Willis Re believe this could possibly indicate new emerging trends that the insurance industry will have to think about going forward.
“A record number of North Atlantic hurricanes formed in 2020, but landfalls did not occur in great numbers, or touch areas with highly concentrated insured exposures. If they had, the story of 2020 would have been dramatically different," according to Vaughn Jensen, executive vice president, catastrophe analytics at Willis Re North America.
"The sheer number of storms – and the continued incidence of billion-dollar wildfires in the US and elsewhere, plus the severity of the Iowa derecho event – gives the industry cause to consider new emerging trends,” Jensen noted.
The largest insured losses from a single event in the US came from Hurricane Laura in late August with approximately $8 billion to $9 billion in losses.
In Europe, the largest loss-causing event was Windstorm Sabine/Ciara that affected more than 10 countries producing close to $2 billion in insured losses, although the clustering of windstorms - Ines, Dennis, and Jorge - showed the potential to cause larger insured losses.
In Asia, Tropical Cyclone Haishen (Kristine) passed by Japan and South Korea in early September causing less than $1 billion in insured losses, which contrasts with the tropical cyclone losses observed in Japan during 2019.
In the Middle East, the largest insured loss event in 2020 was the man-made explosion at Beirut’s port with estimated insured losses of $1.5 billion, while in Latin America and the Caribbean, the largest event of 2020 was hurricane Iota in November with an estimated economic loss in the order of $1.3 billion.
Yingzhen Chuang, regional director, catastrophe analytics at Willis Re International, said: “Natural catastrophe losses were high in 2020, but things could have been worse, given the number of storms which formed around the world.
"Fortunately, despite an active Atlantic Hurricane season, landfalls were limited. Whilst losses in Europe were modest, we did see a number of earthquake events as a reminder of the seismically active nature of southern Europe, as well as severe flooding from windstorms and hailstorm activity. During a year when Covid-19 dominated catastrophe loss discussions, there were nevertheless a series of smaller but impactful natural catastrophe events.”
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