The catastrophe model development center of excellence issued its mid-year Global Catastrophe Recap report – and the numbers offer insurers a glimmer of hope for 2014.
The data show that economic losses from global natural disasters during the six-month period ending June 30 totaled $54 billion, compared to last year’s whopping $95 billion – around 49 per cent lower than the 10-year (2004-2013) average of $106 billion.
“Despite some well documented natural disaster events during the first half of 2014, our data show that losses from both an economic and insured perspective were each below their recent averages,” says Steve Bowen, associate director and meteorologist with
Aon Benfield’s Impact Forecasting team. “However, a relatively quiet first six months does not mean a similar trend will continue throughout the rest of the year.”
Insured losses for the period reached $22 billion ($27 billion in 2013) – approximately 19 per cent below the 10-year average of $27 billion. All numbers are in US dollars.
Around 39 per cent of global economic losses sustained during the first half of 2014 were covered by either private or government-sponsored insurance programs, slightly above the 10-year average of 30 per cent, highlighting that a greater proportion of disaster losses occurred in regions with higher insurance penetration.
The severe thunderstorm peril was the costliest disaster type, accounting for 32 per cent of the economic loss and 46 per cent of the insured loss during the period, and comprising mainly hail and wind events in the North America and Europe.
Although encouraging, Bowen does warn of the perennially poor third quarter.
“The third quarter historically is the costliest for natural disasters and is primarily driven by the peak of the Atlantic Hurricane Season,” he says. “While the pending El Nino is likely to limit the overall number of storms in the basin, it would only take one major landfalling event to quickly make 2014 an above average year for losses – and history suggests that it is just a matter of time before the U.S. endures another major hurricane.”
In order of size, the five largest economic loss events in the first half of 2014 were Japan’s winter weather in February ($6.25 billion); Southern and Eastern European flooding in May ($4.5 billion); Brazil’s drought from January to June ($4.3 billion); the U.S. drought from January to June ($4 billion); and the severe weather in Europe in June ($3.5 billion).
