Reinsurance firm Swiss Re’s sigma has estimated that the first-half of 2014 resulted in around $44 billion of economic losses and $21 billion of insured losses from natural catastrophe and man-made disaster events.
Swiss Re’s sigma has released its preliminary estimates for losses attributable to the insurance and reinsurance industry from the catastrophe and disaster events seen in the first six months of 2014. The global insurance industry covered just under half the economic loss, at $21 billion, which is down on the $25 billion seen in the first-half of 2013.
The $41 billion of estimated economic losses is well down on the $59 billion from H1 2013 and even further behind the ten-year average for H1 losses which stands much higher at $94 billion.
$19 billion of the insured losses were from natural catastrophe events, again down from the $21 billion seen in H1 2013 and under the ten-year average of $23 billion.
The most costly insured catastrophe events of the first-half of 2014 are listed as follows:
- May thunderstorms and hail across the U.S., causing economic losses of $3.2 billion and insured losses of $2.6 billion.
- June’s Storm Ela, impacting France, Germany and Belgium, causing economic losses $2.7 billion of and insured losses of $2.5 billion.
- February’s Japan snowstorms, which caused an economic loss of $5 billion and an insured loss of $2.5 billion.
- January’s snow storms in the U.S., causing economic losses of $2.5 billion and an insured loss of $1.7 billion.
- May thunderstorms and tornadoes in the U.S., causing economic losses of $1.7 billion and an insured loss of $1.1 billion.
The chart below shows the trend in recent years, which looking across this period would suggest that 2014 is around average in terms of first-half catastrophe insured losses.
Swiss Re notes the issue of insurance penetration, highlighting in particular the estimated $4.5 billion of economic losses from flooding in the Balkans and eastern Europe in May which resulted in negligible insurance industry losses.
This is the opportunity for an insurance and reinsurance industry increasingly pressured by competition and excess capital, which this level of losses will not help to erode. Narrowing this gap between economic and insured losses, through the creation of new insurance and reinsurance products which are designed to be appropriate for and to respond to perils in emerging economies and under served regions of the world is possibly the largest growth opportunity the market has had in years.