Natural catastrophe claims are on an uneven but upward path for U.S. property& casualty insurers. The average was $100 billion from 2017 through 2021, up from less than $50 billion in the previous five-year period. Heightened awareness of climate change might suggest that our warming planet is the leading cause, but closer analysis points to a more nuanced perspective:

• Comparing any two five-year periods can give a false impression of longer-term trends because of extreme variability in natural catastrophe experience. Verisk's modeling suggests it's not rare for average losses to exceed $100 billion in any five-year span.
• Climate change indeed affects multiple atmospheric perils in various ways, from precipitation patterns in wildfire-prone areas to the effects of ocean temperatures on hurricane activity.
• Legal and regulatory trends, such as increasingly costly claims litigation and broader coverage requirements, are adding a man-made factor to rising catastrophe claims.

For insurers and reinsurers, the way forward through these complex challenges is preparedness. This article, the first in a series, examines the overall importance of data and analytics in navigating natural catastrophe risk. Articles to follow will look more deeply into three perils: Severe thunderstorms and hail, wildfire, and hurricanes.