Global insured catastrophe losses in 2014 hit lowest level in five years: Guy Carpenter

Global insured losses in 2014 were at the lowest level seen since 2009, Guy Carpenter & Company LLC, a global risk and reinsurance specialist and a wholly owned subsidiary of Marsh & McLennan Companies, said in its annual Global Catastrophe Review, released on Feb. 25.

The report said that significant insured losses in 2014 totalled about US$33 billion, a dramatic drop compared to the historic insured losses seen in 2011, which totalled approximately US$126 billion.

“Although insured losses for 2014 were among the lowest recorded in years, we still observed powerful impacts and significant losses from both natural and man-made catastrophes,” said James Waller, Ph.D, research meteorologist at GC Analytics. “Notable insured losses from around the globe included the 2014 February snowstorms in Japan, hail and windstorms in Europe, severe flooding in the United Kingdom and a cold, stormy winter in the eastern half of North America.”

The Americas comprised 57 per cent of global losses in 2014, as compared to 48 per cent in 2013, the report said. Arctic winter weather, hurricanes, earthquakes and convective outbreaks contributed to these insured losses.

In the United States and Canada, the frigid winter caused US$2.3 billion in insured losses alone. The North Atlantic Basin experienced six hurricanes in 2014, one of which hit the mainland of North America. In the East Pacific, 2014 was the most active hurricane year since 1992, with 16 hurricanes total and nine major hurricanes affecting the region. The most impactful hurricane of the season, Odile, struck the Baja Peninsula of Mexico and caused an estimated US$1.6 billion in insured losses.

“Though the eye of Hurricane Gonzalo passed directly over Bermuda, exceptional damage was offset in part due to the area’s resilient building codes,” said Waller. “Although 2014 was a relatively quiet year for catastrophes, events such as Odile and Gonzalo reaffirm the importance of continued education and the implementation of innovative risk management strategies to mitigate the losses experienced from a catastrophe.”

In total, insured losses in Europe, Africa, and the Middle East accounted for about 21 percent of global insured losses in 2014, the report said. Among the most notable events included the hail and windstorm Ela, which affected areas including Germany, France, Belgium and Austria. Insured losses from this severe storm totaled around US$2.8 billion.

Asia and Australasia endured both natural and man-made catastrophes, accounting for 23 per cent of estimated global insured losses in 2014. Five tropical cyclones affected China throughout the year. The strongest of the five, Typhoon Rammasun, had estimated insured losses totaling $250 million.