Extreme weather drives up natural catastrophe losses
October’s hail storm in eastern Australian states and other major catastrophes globally led to $US116 billion ($162 billion) in insured losses last year, the third highest since 2011, according to estimates from reinsurance broker Gallagher Re.
Gallagher Re says a series of extreme weather events in the US and worst ever floods in Europe were some of the key major catastrophes.
Tropical cyclones comprised 35% of overall losses, followed by severe thunderstorms at 25% and flood at 18%.
In terms of losses by region, North America accounted for 68% of losses, followed by Europe, Middle East and Africa, at 23%.
The reinsurance broker says the numerous hailstorms that struck Australia last October cost insurers about $US733 million ($1.03 billion).
“It was a heavy year for natural catastrophes, despite the absence of a very significant single loss event,” Gallagher Re Chairman International Reinsurance James Vickers said. “Notably, claims originating from secondary perils were substantial.
“That perhaps calls for an industry-wide redefinition of the phrase, and is certainly a phenomenon that underwriters are paying close attention to.”
Gallagher Re says the largest single loss event was Hurricane Ida which struck the US in August, costing insurers roughly $US37 billion ($51.8 billion).
Hurricane Ida caused a huge economic loss, due to strong winds and flooding along its track, the reinsurance broker said.
“The widespread and intense rainfall affected highly populated areas from Philadelphia to New York, leading to major flash flooding.”
The reinsurance broker describes last year as an “extraordinary year for extreme weather” in the US.
“Freezing temperatures and heavy snowfall were reported in states that do not typically see extended periods of cold weather, including, Texas, Oklahoma, Arkansas, Missouri, Louisiana and Mississippi,” it said.
Storm Bernd, which inundated Germany and neighbouring countries, caused more than $US13 billion ($18.2 billion) in insured losses.
“A point worth noting is that the impact from Bernd came as a consequence of the storm remaining in the region longer than expected,” Gallagher Re said.
“Climate change may have some influence on the frequency and severity of flood events, with one consequence of climate change potentially being the weakening of the jet stream, which caused the 2013 and 2021 storms to stall leading to more accumulated precipitation.”
Gallagher Re says the scale of the losses led to reinsurance programs being affected to various extents, and impacted market dynamics at the 1/1/22 renewals at regional levels.
