Swiss Re: Insured disaster losses hit $66bn in H1 2024, up slightly year-on-year

Reinsurance firm Swiss Re has estimated that global insured natural catastrophe losses for the first-half of 2024 were US $60 billion, which it says was 62% above the 10-year average, while man-made disaster losses were $6 billion for the period, which as a total is up from $65 billion for H1 2023.

The first-half was the second costliest on record for insured losses from severe thunderstorms, with US $42 billion of the total just from that peril, which Swiss Re notes is some 87% higher than the 10-year average.

As a result, severe thunderstorms, mainly in the US, accounted for 70% of insured losses globally, the reinsurance company said today.

Swiss Re’s estimate for global nat cat insurance losses of US $60 billion for H1 2024 compares to estimates from Aon of over $58 billion of insured catastrophe losses around the globe in H1 2024, while fellow broker Gallagher Re estimated the total would be at least $61 billion, and reinsurer Munich Re put the total at $62 billion for the period.

Balz Grollimund, Head of Catastrophe Perils at Swiss Re, commented, “In recent years, severe thunderstorms have emerged as a main driver of a significant increase in insured losses. This is due to growing populations and higher property values in urban areas, along with insured property being more vulnerable to hail damage. Therefore, multi-billion-dollar loss events from this peril are likely to become more common.”

Jérôme Jean Haegeli, Swiss Re’s Group Chief Economist, added, “Insured losses from severe thunderstorms have been growing due to a mix of factors including inflation, which has contributed to rising construction costs. And, with economic development, overall exposures will continue to increase. That’s why investing in protective measures – such as shielding vulnerable communities from floods or improving building codes to protect homes from severe hailstorms – is vital.”

The insured nat cat loss total of $60 billion is flat with the previous year according to Swiss Re’s figures, when it also reached $60 billion in H1 2023.

Man-made catastrophe events contributed a further $6 billion in losses though this year so far, taking total insured disaster losses for H1 2024 to $66 billion.

Which, as the man-made loss burden was only $5 billion for H1 2023, means the total for insured disaster losses was actually slightly lower at $65 billion for H1 2023, according to Swiss Re.

One notable factor is that there was a high-frequency of smaller to mid-sized catastrophe events in the first-half of 2024, Swiss Re noted.

It’s interesting to note the lack of severe impacts to reinsurers’ results so far after the mid-year reporting seen so far, as with higher attachments and far less aggregate coverage offered the losses are mainly falling to the primary insurance market.

Just five years ago, a first-half of the year such as we’ve seen in 2024 could have driven significant impacts to reinsurance and also insurance-linked securities (ILS) capital sources, especially through all-peril aggregate covers that proliferated around that time.

Given how resilient the reinsurance and ILS market has proven to loss activity this year, it is clear the reset economic share of financial impacts from disasters is benefitting the second and tertiary tiers of the insurance capital stack.

While at the same time, in first-half reporting so far, we haven’t seen any evidence of really significant effects on primary companies either, showing that the industry as a whole appears to have managed this reset effectively and price increases as well as retained earnings at primary levels are also helping to buffer companies against the effects of such a high level of insured disaster losses over the first-half.