Global catastrophes cause $22 billion of insured losses in first half of 2014

Global natural catastrophes for the first half of the year accounted for US$22 billion in insured losses, with more than half occurring in the United States, Impact Forecasting said in a report Wednesday.

Roughly 55% of the insured losses came from the U.S., with 23% in Europe, and 19% in Asia, according to Impact Forecasting, the catastrophe model development arm of Aon Benfield.

Insured losses were, however, about 19% below the 10-year average of US$27 billion.

Economic losses for the first half of 2014 were also below the 10-year average, at US$54 billion, compared with US$106 billion average for the period of 2004 to 2013.

“Despite some well documented natural disaster events during the first half of 2014, our data show that losses from both an economic and insured perspective were below their recent averages,” Steve Bowen, associated director and meteorologist with Impact Forecasting said in a statement.

“However, a relatively quiet first six months does not mean a similar trend will continue throughout the rest of the year.”

About 39% of global economic losses during the first half of the year were covered by either private or government-sponsored insurance programs, slightly above the 10-year (2004-2013) average of 30%, which highlights that a greater proportion of disaster losses occurred in regions with higher insurance penetration, Impact Forecasting noted.

Severe thunderstorms were costliest, accounting for 32% of economic losses and 46% of insured losses during the first six months, mainly from hail and wind events in the U.S. and Europe.

In total, the first half of the year comprised seven separate billion-dollar insured loss events, with four occurring in the U.S., two in Europe, and one in Asia.

In order of size, the five largest economic loss events were Japan winter weather in February (US$6.25 billion); Southern and Eastern European flooding in May (US$2.5 billion); Brazil drought from January to June (US$4.3 billion); U.S. drought from January to June (US$4.0 billion); and severe weather in Europe in June (US$3.5 billion).

“The third quarter historically is the costliest for natural disasters and is primarily driven by the peak of the Atlantic Hurricane Season,” Bowen noted.

“While the pending El Niño is likely to limit the overall number of storms in the basin, it would only take one major landfalling event to quickly make 2014 an above average year for losses – and history suggests that it is just a matter of time before the U.S. endures another major hurricane.”