According to preliminary sigma estimates from Swiss Re, total economic losses from natural and man-made catastrophes in 2018 declined to USD $155 billion from USD $350 billion in 2017. Global insured losses are estimated to be around USD $79 billion, higher than the annual average of the previous 10 years.
According to the preliminary report, there have been a number of smaller and mid-sized loss-generating disaster events across all regions of the globe this year, also affecting regions with well-established insurance cover. Together, these have made 2018 the fourth costliest year in 50 years of sigma records in terms of losses covered by the insurance industry.
Globally, more than 11,000 people have died or gone missing in disaster events in 2018, close to the number of victims in 2017.
Of the total economic losses from natural catastrophes and man-made disasters estimated to be about USD $155 billion, natural catastrophes caused USD $146 billion while and man-made disasters caused USD $9 billion. Of the total economic losses, USD $79 billion have been covered by insurance, down from USD $150 billion in 2017, but more than the previous 10-year annual average (USD $71 billion). Natural catastrophes accounted for USD $71 billion of this year’s insured losses, and man-made disasters for the remaining USD $8 billion.
Examples of this year’s devastating natural catastrophe events include Hurricanes Michael and Florence; Typhoons Jebi, Trami and Mangkhut; heat waves, droughts and wildfires in Europe and California; winter and thunderstorms around the world; floods in Japan and India; earthquakes in Japan, Indonesia and Papa New Guinea; and volcano eruptions in Hawaii.
The report notes that insurance contributed USD $79 billion in paid claims to lessen the hardship for people and businesses affected by this year’s disaster events.”In other words, more than 50 percent of all economic losses were insured, demonstrating again the significant contribution of the insurance sector to mitigating catastrophe risk.” the report says.
Swiss Re notes that these loss estimates are preliminary and are subject to change since not all loss-generating events have been fully assessed yet.
Regarding the loss of more than 11,000 people in catastrophe events in 2018, the earthquake in Sulawesi, Indonesia in September had the highest human toll of the year, with more than 3,500 estimated dead or missing.
Extreme weather caused the fourth highest number of insured losses. While there has not been a singular major natural catastrophe event (such as Hurricanes Harvey, Irma, Maria in 2017) in 2018, nevertheless, the aggregated losses from a number of smaller and mid-sized events, alongside some major man-made disasters, have caused sizable overall insured losses.
According to the report, like last year, the losses from the 2018 series of events “highlight the increasing vulnerability of the ever-growing concentration of humans and property values on coastlines and in the urban-wildlife interface. The very presence of human and property assets in areas such as these means extreme weather conditions can quickly turn into catastrophe events in terms of losses inflicted.”
View this article online: https://www.insurancejournal.com/news/national/2018/12/18/512384.htm