CRESTA index highlights billion-dollar insurance losses from global catastrophes

CRESTA index highlights billion-dollar insurance losses from global catastrophes | Insurance Business Australia

Catastrophe & Flood

CRESTA index highlights billion-dollar insurance losses from global catastrophes

Update covers data on insurance industry losses for non-US catastrophic events

Catastrophe & Flood

By
Roxanne Libatique

CRESTA, an organisation known for setting global standards for risk accumulation zones and natural catastrophe industry losses, has published the Q2 2024 update of its CRESTA Industry Loss Index (CLIX).

The update encompasses data on insurance industry losses for non-US catastrophic events that resulted in losses over US$1 billion.

A review of 21 catastrophic events from the last three years was conducted, leading to revised or finalised loss figures for 10 of these events.

Notable catastrophic events across the globe, except for the US

The most notable revision was for the severe convective storms in Northern Italy in July 2023, with losses now estimated at US$5.7 billion, an increase from the previous US$4.8 billion reported in the Q1 2024 CLIX update.

Additionally, three new events from the second quarter of 2024 have been added to the CLIX Loss List. These include:

mid-April flash floods in Dubai and surrounding areas (initially estimated at US$2.3 billion)
a hailstorm in Japan’s Hyogo prefecture on April 16 (initially estimated at US$1.1 billion)
early June floods in Southern Germany (initial estimate to be provided in the Q3 update)

The Dubai floods mark the first multi-billion-dollar event in the Middle East to be included in the CLIX Loss List, which dates back to 2000.

Catastrophic events across the globe, except for the US, in H1 2024

The first half of 2024 saw only the Japan Noto earthquake surpassing US$1 billion in losses, bringing the total number of billion-dollar catastrophic events for the period to four.

The aggregated losses for these events are expected to align with the long-term first-half average of $8.5 billion.

“With the release of the CRESTA CLIX second quarter update, we can see that there was average cat loss activity for the first half of 2024 coupled with upward revisions for events from prior years,” said Matthias Saenger, a member of the CRESTA CLIX team. “These increases in insured losses over a period of time demonstrate the importance of our approach of reviewing loss figures up to a maximum of three years after an event. This process enhances the accuracy of industry loss numbers which are fundamental for both the assessment of natural catastrophe risks and its management through insurance and reinsurance solutions.”

CLIX, a service offered by CRESTA, provides benchmark information on natural catastrophe losses impacting the global insurance industry since 2000. The database covers global regions, excluding the US, with quarterly reviews of industry losses up to three years post-event.