U.S. had an 'exceptionally high portion' of 2021's NAT CAT losses

During 2021, natural catastrophes (NAT CAT) caused more than $280 billion in losses worldwide, according to Munich Re, which reported approximately $145 billion of those losses occurred in the U.S.

Globally, losses have shown a year-on-year growth trend as NAT CAT events caused $210 billion in 2020 and $166 billion during 2019, according to the multinational insurance company. The previous year was among the costliest for the insurance industry and overall losses from natural disasters were the fourth highest on record. With $355 billion in total losses, 2011 retains the record.

Hurricane Ida was the costliest natural disaster

Causing $65 billion in losses, $36 billion of which was insured, Hurricane Ida was the most expensive natural disaster during 2021. The Category 4 hurricane damaged and destroyed tens of thousands of buildings in Louisiana before moving up to the northeast, where it caused severe flooding, particularly in New Jersey and New York City.

In addition to seeing an above-average level of tropical storm activity, 2021 also saw a deep freeze impact insureds in the south, particularly Texas, as well as a series of tornadoes in December tear across several states late in the year.

In Europe, heavy rains in July caused severe flooding and western Germany was hit especially hard. Munich Re reported losses from the European flood event totaled $54 billion and Germany accounted for $40 billion of that total.

However, only $13 billion of total losses from the torrential rainfall was insured, according to Munich Re. The relatively low level of insured losses was attributed to Germany’s limited flood insurance density and uninsured infrastructure losses.

Asia-Pacific sees modest losses, wide insurance gap

During the past year, the Asia-Pacific region saw $50 billion in total losses, according to Munich Re. Globally, the region accounted for just 18% of overall losses and 7% of insured losses. Only $9 billion of Asian-Pacific losses were insured.

The low level of insured losses in the region could be a function of the wide insurance-coverage gap in the area. Munich Re noted the region has an insurance gap of 83%.

Further, a large insurance gap is also witnessed on a global level. More than half (57%) of losses from natural catastrophes in 2021 were not insured, according to Munich Re. Roughly $120 billion of the year’s NAT CAT losses were insured.

Related:

• The U.S. states hit hardest by natural disasters
• Nearly 1,000 buildings destroyed in Colorado fires
• Californians were more reliant on insurer of last resort in 2020