Cresta has updated its industry loss estimates and provided a quarterly update, in which the organisation says that the insurance and reinsurance market loss from the July 2021 European flooding is now estimated to be $13.8 billion.
That’s up from $13.1 billion at the last quarterly update, but notably up by 15% from $12 billion from where it pegged the European flood industry loss at the start of this year.
Which implies a good deal of continued loss creep related to the flooding events, that caused the bulk of their insured damages in Germany in July 2021, which we understand has been reflected in some reinsurance towers.
The European Summer Floods from July 2021 are the largest industry event in Cresta’s CLIX database during the period under review, and the steady increase in loss quantum drives home the need for regular reviews of catastrophe industry losses as they develop over time, the organisation said.
In its latest update, Cresta highlights that international catastrophe industry loss activity has been above average year-to-date in 2022.
It’s important to remember that Cresta’s CLIX (CRESTA Industry Loss Index) data only covers international, non-United States, catastrophe insured losses that cost the industry more than a billion dollars.
Cresta has tracked six international catastrophe loss events which have exceeded the USD 1bn industry loss threshold in the first six months of 2022.
These are the European windstorm series of mid-February, the Eastern Australia flooding in February-March, the Mw7.3 earthquake which struck the area of Fukushima in Japan in March, the KwaZulu-Natal floods in South Africa in April, and two severe convective storms in France and neighbouring countries in June.
Matthias Saenger, Product Manager of CRESTA, explained, “An analysis of the CLIX industry loss database shows that an event loss of USD 1bn is reached or exceeded on average 4.5 times per year. With six events already confirmed to have exceeded this loss level, the year 2022 is already above average for international Cat loss activity.”
In addition, Cresta is now investigating third-quarter international catastrophe loss events including Typhoons No. 11 (Hinnamnor) and No.14 (Nanmadol) in Asia in September, and the losses caused by Hurricane Fiona in the Caribbean and Canada also in September.
Each of these are thought to have the potential to breach the US $1 billion industry loss threshold after which Cresta will report on them.