International (non-US) catastrophe loss events that cost the insurance and reinsurance industry more than $1 billion ran above expectation in 2021, with the accumulated loss of US $21.6 billion well above the US $13.7 billion long-term average.
That US $13.7 billion works out as $17.2 billion at today’s currency rates, but still the impact of catastrophes in 2021 was significant for many regions of the world.
A factor that made 2021’s international catastrophe losses (ex-US) unusual, is the fact precipitation was a driver of a significant amount of them, according to the Cresta organisation.
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.
In 2021, the majority of the US $21.6 billion of insurance and reinsurance market losses came from water related events in the summer months.
“Most of these losses were driven by extreme precipitation events during the summer months, generating huge masses of water within comparatively short time periods. Such events could become more frequent, driven by higher temperatures and increased water-holding capacity in the atmosphere, as well as the use of impenetrable surface materials as part of urban development and infrastructure construction which prevent water drainage into the soil,” Cresta explained.
The organisation has updated its loss estimates and the European flooding from July 2021 has been increased from $11 billion to now a $12 billion industry loss event.
That’s excluding the Belgian government supported insurance scheme that would otherwise add another $1.2 billion to the total, Cresta said.
The only other billion dollar plus international catastrophe loss events through 2021 were the Fukushima earthquake in Japan, the June convective storms in Europe and the Henan floods in China, which all exceeded US $1 billion in losses, and together account for an insurance and reinsurance market loss of US $9.6 billion, Cresta said.
Matthias Saenger, Technical Manager of CLIX, said, “With the ever-changing risk landscape driven by a changing climate and growth in insured assets, understanding the past is a key part of detecting trends in the frequency and severity of major natural catastrophe events.”
With global insured catastrophe losses preliminarily estimated at around US $105 billion in 2021 by global reinsurance firm Swiss Re, Cresta’s data shows that international catastrophes continue to deliver far smaller losses than events in the United States tend to.