August 11, 2020 by Jason Contant
Canada’s costliest-ever hailstorm contributed to the largest insured losses in North America since the first half of 2011, according to preliminary natural catastrophe estimates from Swiss Re.
The hailstorm that struck Calgary in June cost the industry $1.2 billion based on more than 70,000 claims. Insured losses from spring flooding in Fort McMurray was also upgraded recently to more than $520 million, meaning the country has already seen about $2 billion in Nat Cats with several months still left in 2020.
Preliminary sigma estimates from the Swiss Re Institute show that North American severe convective storms (thunderstorms with tornadoes, floods, and hail) caused insured losses of over US$21 billion in the first half of 2020. This was the highest since 2011 H1, when losses from this peril alone were about US$30 billion.
Global insured property losses from disasters were US$31 billion in the first half of 2020, up from US$23 billion a year earlier. Natural catastrophes accounted for US$28 billion of the insured losses, most resulting from secondary perils events.
“The main driver of the first half losses were secondary perils, with thunderstorms in North America playing a significant role,” Swiss Re said in a release, noting that loss estimates are for property damage and exclude COVID-19 related claims. Climate change is also expected to worsen and amplify the scale of secondary perils events and associated losses in the future, the reinsurer said.
“Climate change is a systemic risk and unlike COVID-19 it doesn’t have an expiry date,” said Swiss Re Group chief economist Jerome Jean Haegeli.
Global economic losses from Nat Cats and man-made disasters in 2020 H1 were US$75 billion (US$72 billion from Nat Cats and US$3 billion from man-made disasters). Of the economic losses, about 40% (US$ 31 billion) were covered by insurance.
The global losses for the first half of the year may be subject to upward revision. In addition, the ongoing hurricane season in the North Atlantic could generate higher losses in the remainder of the year. Up to the date of publication, there have already been nine named storms observed, a record this early in the year.
Feature image by iStock.com/Andrey Arekhva