Insured nat cat losses exceed 10-year average in H1 2021 at $42bn: Aon

The first half of 2021 was the costliest for the insurance industry since 2011 with claims from natural catastrophes exceeding the 10-year average, despite recording a below-average number of events, according to  Aon’s latest cat report.

Global natural disaster events during the first half of 2021 caused around $93 billion in total economic losses, down 32 percent on the 10-year average of $136 billion.

Insured losses were estimated at $42 billion, two percent higher than the 10-year average of $41 billion. Aon, however, noted that these totals are preliminary and will change as losses continue to develop.

Insured losses were 39 percent higher than the 21st century average of $30 billion, and 101 percent higher compared to the average since 1980 ($21 billion). Economic losses were 16 percent lower at $110 billion, and nine percent higher at $85 billion, for the same periods respectively.

Natural disasters were responsible for approximately 3,000 fatalities during the first half of 2021, significantly below the average since 1980 of 38,900, and the median of 7,600.

The 163 notable natural disaster events recorded by Impact Forecasting for 1H 2021 was below the 21st century average of 191 and the median of 197. There were at least 22 separate billion-dollar economic events during the first half of the year – led by the United States with ten events. Asia Pacific had six events, while Europe, the Middle East and Africa (EMEA) had four events and the Americas ex-US had two.

The costliest event was the Polar Vortex-induced period of extreme cold in the US, which caused 217 fatalities and an insured loss of at least $15 billion. Loss development for that event is expected for months to come.

Insured losses resulting from natural catastrophes during the period were notably above average in the US, up 76 percent, and EMEA, up 32 percent, compared to the 21st century 1H average. Losses were lower in Asia Pacific by 1 percent and in the Americas by 54 percent.

Steve Bowen (pictured), managing director and head of Catastrophe Insight on the Impact Forecasting team at Aon, said: “The first half of 2021 became the costliest first six months of the year in terms of natural disasters for the insurance industry since 2011, despite recording a below-average number of events.

“The juxtaposition of observed record heat and cold around the globe highlighted the humanitarian and structural stresses from temperature extremes. As climate change continues to amplify the severity of weather events, it becomes more imperative to explore ways to better manage the physical and non-physical risks that are more urgently requiring actionable solutions.”

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