It has already been an active and costly year for natural disasters.
Aon Benfield's "Global Catastrophe Recap: First Half of 2016" report reveals that for the first half of 2016, preliminary global economic losses reached $98 billion and global insured losses $30 billion — the highest levels since 2011.
On the positive side, this estimate is still slightly below the 10-year averages of $112 billion and $31 billion, respectively. However, the losses were slightly above the longer-term averages of $84 billion and $24 billion dating to 2000.
The percentage of global economic losses covered by public and private insurers was 30 percent, slightly above the 10-year average of 28 percent. The U.S. accounted for 47 percent of global insurance losses sustained by public and private insurance entities.
|Major thunderstorms in U.S.
From an insurance perspective, severe convective storm was the costliest peril ($12.3 billion), comprising 42 percent of the loss total. Most of the insurable losses from severe convective storm resulted from major thunderstorms in the United States that prompted widespread hail, damaging straight-line winds, and tornadoes. Texas alone recorded roughly 55 percent of all insured severe convective storm losses.
Globally, there were at least six individual billion-dollar insured events (five of which were weather-related) during the first two quarters of the year. Four of the events crossed the multi-billion dollar loss threshold ($2 billion or greater).
The costliest event for the industry during was the series of April earthquakes in Japan’s Kumamoto prefecture ($5 billion). However, Storm Elvira in Europe, the wildfire in the Canadian province of Alberta, and the series of major hailstorms in Texas from April 10-15, were also significant with losses exceeding $3 billion.
The Aon report notes that the third quarter has historically been the costliest for the insurance industry, which is typically driven by the peak of the Atlantic Hurricane Season. With the likely transition from El Niño to La Niña during the second half of 2016, there is a chance that hurricane frequency could be higher than seen in recent years.
|Earthquakes, wildfires, flooding and hailstorms
"The first half of 2016 ended up as the costliest on an economic and insured loss basis since 2011," said Steven Bowen, director within Aon Benfields's Impact Forecasting team.
"The year has already been highlighted by a significant earthquake sequence in Japan, the Fort McMurray wildfire in Canada, flooding in Western Europe and a series of extensive hailstorms in the United States. With the pending transition to La Niña during the second half of the year, there will be a heightened focus on the risk of flooding across parts of Asia and hurricane landfall in the Atlantic Ocean basin. The financial toll of weather disasters during La Niña years has historically been among the costliest on record, and so we will wait to see whether this trend plays out in the coming months," according to Bowen.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Jayleen R. Heft
Jayleen Heft is the digital content editor for PropertyCasualty360.com. Contact her at [email protected].
