July 21, 2015 by Canadian Underwriter
Insured losses for global natural disasters for the first half of 2015 were US$15 billion, down 47% from the 10-year average of US$28 billion, Impact Forecasting said in its Global Catastrophe Recap: First Half of 2015 report, released on Tuesday.
The report from Impact Forecasting, Aon Benfield’s catastrophe model development team, evaluates the impact of natural disaster events that occurred worldwide in the first six months of the year. The report said that global natural disaster losses during the first half of 2015, from both an economic and insured loss perspective, were each below the 10-year (2005-2014) average. [click image below to enlarge]
Preliminary data determined that economic losses were US$46 billion, down 58% from the 10-year average of US$107 billion, while insured losses were US$15 billion, down 47% from the 10-year average of US$28 billion.
“The first half of 2015 was the quietest on an economic and insured loss basis since 2006,” noted Steve Bowen, associate director and meteorologist with Aon Benfield’s Impact Forecasting team, said in a press release. “Despite having some well-documented disaster events in the United States, Asia Pacific and Europe, it was a largely manageable initial six months of the year for governments and the insurance industry.”
Impact Forecasting reported that the percentage of global economic losses that were covered by insurance (including both private insurers and government-sponsored programs) was 31%. This is slightly above the 10-year average of 27% because the majority of the losses occurred in regions with higher insurance penetration, Impact Forecasting noted in the release. [click image below to enlarge]
By contrast, around 2% of the multi-billion-dollar economic loss from the 7.8-magnitude Nepal earthquake on April 25 that claimed as many as 10,000 people was covered by insurance. “Statistics like this show how catastrophe models can play a role in helping the insurance industry to better understand these risks and seek ways to grow insurance penetration in underserved regions,” the release said.
The severe thunderstorm peril was the costliest disaster type, comprising 33% of the economic loss and 49% of the insured loss. Most of the costs were attributed to strong convective thunderstorm events that prompted widespread hail, damaging straight-line winds, tornadoes, and major flash flooding in the United States during the months of April, May and June, the reported noted. There were at least 10 separate billion-dollar events in the first half of 2015 (at least nine of which were weather-related), including a minimum of five in the United States.
A majority (73%) of the insured losses were sustained in the United States due to an active winter season combined with numerous spring severe convective storm events. Asia Pacific was second with 14% and Europe, Middle East & Africa was third with 11% of the insured loss.
Looking ahead to the rest of 2015, Bowen said that “the continued strengthening of what could be the strongest El Nino in nearly two-decades is poised to have far-reaching impacts around the globe. How that translates to disaster losses remains to be seen, but something to keep a close eye on in the coming months.”