The insurance and reinsurance industry loss from global catastrophe events in the first-quarter of 2017 has increased further to $9.6 billion, and the final Q1 toll could creep higher in the coming weeks, according to reinsurance broker Aon Benfield.
In its Reinsurance Market Outlook report released in March, Aon Benfield put estimated Q1 insured losses from catastrophe events at $7.6 billion.
However, Aon Benfield Director & Meteorologist, Steve Bowen, has informed Artemis that the tally for global first-quarter insured losses continues to rise further, as claims filter through, and assessments remain ongoing for a number of the major events witnessed in Q1 2017.
“As of today, the Q1 total now sits at USD9.6 billion and it is entirely expected for this total to further increase in the coming weeks and months,” said Bowen.
Aon Benfield reported recently that losses in the U.S. in the first-quarter from severe thunderstorms and convective weather reached a record $5.7 billion, so it’s not too surprising that the overall insured loss estimate for Q1 is now higher than the $7.6 billion estimation reported previously.
The average, overall insured loss for the first-quarter between 2000 to 2016 stands at $10 billion, so the $9.6 billion figure is fairly in line with the long-term average. Although, this period includes the substantial insured losses from non-weather natural disasters in 2011, which includes the Christchurch, New Zealand earthquakes and the Tohoku region, Japan earthquake and tsunami.
When removing these losses and looking at the average, weather-only Q1 insured losses between 2000 and 2016, the 2017 $9.6 billion estimate is $3.3 billion, or 52% above the long-term average of $6.3 billion.
Broken down by region, Aon Benfield reveals that $6.6 billion (69%) of the Q1 insured loss estimate is from the U.S., $240 million (2%) from the Americas, which includes non-U.S. North America and South America, $1.3 billion (14%) is from the Europe, Middle East and Africa (EMEA) region, and the remaining $1.4 billion (15%) is from the Asia-Pacific (APAC) region.
Bowen told Artemis that assessments from several major catastrophes that occurred in the first-quarter are ongoing, which includes the extremely active start to the U.S. severe weather season, several European windstorms, and Cyclone Debbie. So, it’s expected that first-quarter 2017 insured losses from catastrophes, which were all weather-only events, will surpass the $10 billion mark in the coming weeks or months.
The active severe weather start to the year will keep collateralized reinsurance and ILS fund players on their toes, as they update loss estimations and work out how the aggregation of these losses with those occurring throughout the year could impact positions.