24 January 2018Insurance

2017 becomes costliest nat cat year on record

Weather disasters in 2017 added up to $344 billion in global economic losses, according to the latest Aon catastrophe report.

The report reveals that there were 330 natural catastrophe events in 2017 that generated economic losses of $353 billion – of which 97 percent ($344 billion) were due to weather-related events, including hurricanes Harvey, Irma and Maria in the US and Caribbean, plus typhoon Hato in China and cyclone Debbie in Australia. The 2017 natural catastrophe losses were 93 percent higher versus the 2000-2016 average.

Insured losses to the private sector and government-sponsored programmes were among the costliest ever incurred, reaching $134 billion in 2017 – just behind the record $137 billion in 2011. The 2017 insured losses were 139 percent higher than previous year’s $56 billion, primarily due to high insurance penetration in the US that suffered a very active Atlantic hurricane season, severe weather events and wildfires.

“While 2017 was an expensive year for the insurance industry, the reinsurance market had an estimated $600 billion in available capital to withstand the high volume of payouts,” said Eric Andersen, CEO of Aon Benfield. “Most critically, the US weather and wildfire events in particular have demonstrated the value of reinsurance, with claims being paid in an average of eight days to augment the recovery process.”

Aon’s ‘Weather, Climate & Catastrophe Insight: 2017 Annual Report’ also shows that 36 percent ($80 billion) of economic damage from Hurricanes Harvey, Irma and Maria were insured.

Wildfires caused $14 billion of insurance losses in 2017 – the highest on record for the peril.

Overall, 10,000 human fatalities were caused by natural disasters, with the deadliest event being a massive landslide event in Sierra Leone when more than 1,100 people lost their lives.

The report noted that 2017 was the third warmest year on record since 1880 for combined land and ocean temperatures.

Steve Bowen, Impact Forecasting director and meteorologist, said: “The high cost of disasters in 2017 served as a reminder that we continue to face increasing levels of risk as more people and exposures are located in areas that are particularly vulnerable to major, naturally occurring events. As weather scenarios grow more volatile in their size and potential impact, it becomes more imperative than ever to identify ways to increase awareness, improve communication, and lower the insurance protection gap. We know natural disasters are going to occur. The question is how prepared are we going to be when the next one

Join us at Intelligent Automation in Insurance - London 2018.  Book by Jan 31st and you could save £400.

More of today's news

Insurtech investment volume shrinks in 2017

Auto insurtech Nexar raises funds for expansion

Ryan Specialty makes acquisition in New York

Don't miss our insurtech email newsletter - sign up today

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

Insurance
4 April 2018   Global insured catastrophe losses are estimated at between $5 billion and $10 billion, well below the historical average of $14 billion, according to Morgan Stanley analysts.
Insurance
2 February 2018   Aon enjoyed solid growth in 2017 with total revenues increasing by 6 percent to $10 billion compared to the prior year period driven by 4 percent organic revenue growth and a 2 percent increase related to acquisitions, net of divestitures.
Insurance
4 January 2018   The re/insurance industry will bear record catastrophe losses of $135 billion in 2017 following hurricanes Harvey, Irma and Maria as well as a severe earthquake in Mexico, according to Munich Re’s calculations.