According to data released by Impact Forecasting, the catastrophe model development center of excellence at reinsurance broker Aon Benfield, the first-half of 2013 saw natural catastrophes cause $85 billion of economic losses, with around 24% insured leaving an insurance industry catastrophe loss of approximately $20 billion.
The figures are below the historical averages for the last ten years, the ten-year average for economic losses is $100 billion, while the ten-year average for insured losses is $25 billion. Interestingly, economic losses were lower in the first-half of 2012 at $75 billion but insured losses were higher at $25 billion.
Approximately 50% of the $20 billion insured losses are attributed to catastrophe events in the U.S. in the first-half of 2013. The amount of insurance coverage, at 24% of economic losses, is actually below average which is 28%. Impact Forecasting said that this is due to multiple catastrophe events occurring in areas where insurance penetration, or coverage for specific perils (such as flood in Europe) is lower.
In terms of the largest events, the five largest economic loss events in the first-half of the year were the Central European floods in May and June costing $22bn; the China earthquake on April 20th which cost $14bn; the drought in Brazil which cost $8.3bn; U.S. severe weather outbreaks from May 18th to 22nd costing $4.5bn; and drought in China costing $4.2bn.
In terms of insurance industry losses from natural disasters, seven events created insured losses of over $1 billion. The Central European flooding is the largest insured loss with an estimate of $5.3 billion; the U.S. severe weather outbreak of May 18th to 22nd is next at $2.5bn; another U.S. severe weather outbreak from March 18th to 20th cost insurers $1.25bn; the U.S. severe weather outbreak of May 26th to June 2nd cost $1.20bn; Australian floods during January cost $1.04bn; the Canada floods during June cost $1.0 billion; and a U.S. winter storm in early April cost $1.0bn.
Impact Forecasting’s estimate of insured losses from the Central European flooding is higher than estimates from reinsurers such as Swiss Re and Munich Re, who estimated losses in the range of $3.9 billion to $4.5 billion. Impact Forecasting’s estimate sits right in the mid-range of most risk modellers assessments for the flooding event.
You can read more detail on losses from natural disasters during te first-half of 2013 in Impact Forecasting’s report.