Total global losses of USD306 billion in 2017: Swiss Re
Preliminary estimates for insured global losses resulting from natural and man-made disasters in 2017 are around USD136 billion, well-above the annual average of the previous 10 years, and the third highest since Sigma records began in 1970, stated reinsurer Swiss Re in a report released recently.
Total economic losses soared in 2017 to USD306 billion from USD188 billion in 2016. The accumulation of economic and insured losses ramped up in the second half of the year, due primarily to the three hurricanes – Harvey, Irma and Maria – that hit the US and the Caribbean, and wildfires in California. Globally, more than 11000 people have died or gone missing in disaster events in 2017, similar to 2016.
Total economic losses from natural catastrophes and man-made disasters are estimated to be much more than the annual average of the previous 10 years (USD190 billion). Global insured losses from disaster events in 2017 were around USD136 billion, up from USD65 billion in 2016, well above the previous 10-year annual average (USD58 billion), and the third highest on sigma records.
Natural catastrophes accounted for USD131 billion of this year’s insured losses, and man-made disasters for the remaining USD5 billion. “In recent years, annual insurance losses from disaster events have exceeded USD100 billion a few times”, says Martin Bertogg, head of Catastrophe Perils at Swiss Re. “The insurance industry has demonstrated that it can cope very well with such high losses. However, significant protection gaps remain and if the industry is able to extend its reach, many more people and businesses can become better equipped to withstand the fallout from disaster events.”
Extreme weather in the US in the second half of 2017 has been the main cause of the high number of full-year insured losses. In the first half, the losses resulting from disaster events were lower than in the same period of 2016, and well below the annual six-month average of the previous 10 years.
Destruction from the three category 4+ hurricanes Harvey, Irma and Maria stretched from the Texas coast through West Florida to the Caribbean, together causing insured losses estimated to be almost USD93 billion. Given the vast geographic footprint of the hurricanes, which affected multiple locations in quick succession and impacted multiple lines of business, a full assessment of the insured losses is still ongoing. The economic losses from the three events will be much higher given the significant flood damage – often uninsured – from hurricane Harvey in densely populated Houston, Texas, an extended power outage in Puerto Rico after hurricane Maria, and post-event loss amplification.
