Gallagher Re ups the bidding: Q1 nat cats will cost insurers $22bn

Insurers will likely have to foot a $22 billion bill for the global sum of nat cat events recorded in the first quarter of the year, led by $10 billion for US storm activity, analysts at  Gallagher Re have said.

Total insured losses, second highest for Q1 over the past decade behind 2021, are 38% above the average for that decade and 47% above the median.

Q1 economic losses of $77 billion, driven by the Turkey-Syria earthquakes, are the highest since 2011's earthquake-driven $383 billion figure.

The global tallies show a 72% insurance gap on account of the near 90% gap in coverage for the Turkey-Syria earthquakes.

Insurance counts: North America will take 65% of the insurance money after having suffered only 26% of the damage. Insurance will make the bulk of their payments, $17 billion, to cover weather- or climate-related catastrophes, and only $5 billion for the headline earthquake.

US Severe Convective Storm (SCS) activity, including 385 tornados, rendered “the most expensive Q1 on record” at over $13 billion in economic losses and requiring a top-five all-time payment in excess of $10 billion. That payment constitutes 47% of the Q1 insured totals and “is expected to rise,” Gallagher Re warns of loss development.

Gallagher Re also cited “a prolific series of more than a dozen Atmospheric River events” that spawned flooding in California, “historic flooding” in New Zealand and ongoing drought across South America.

In California, 17 atmospheric river events from December 2022 to March 2023 are estimated to have rendered over $3.5 billion in economic losses, with public and private insurance covering at least $2 billion of that total in Q1.

With its report, Gallagher Re has outbid rivals at Aon who put first quarter global economic losses at $63 billion and claimed insurers will have to pick up a $15 billion tab, near what they considered to be the ten-year average.

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