Swiss Re Institute: Insurance losses shrink over first half of 2018
Published: August 31, 2018
Swiss Re Institute has published its global insurance loss report for the first half of 2018, showing economic losses caused by natural catastrophe and man-made disasters sat at US$36 billion through the first six months of the year.
Insured losses from those events totalled US$20 billion during H1 2018. Swiss Re points out this is a sizeable year-on-year decline from the US$30 billion in insured losses recorded during the first half of 2017. Also, down is the number of victims claimed by global disasters, which at 3,900 victims is the lowest half-year amount in over 30 years.
While we have seen record wildfire seasons in Ontario and British Columbia, insurers have so far said losses have been relatively small. It is a similar story on global level, where the ongoing hurricane season has been mild, albeit with two months left to run.
Total economic losses of $US 36 billion are also a huge improvement on recent years. Indeed, the 10-year average for the first half of a year is US$125 billion.
Of that US$36 billion, natural disasters accounted for losses of $US34 billion, down from US$58 billion a year ago. Man-made catastrophes accounted for the remaining US$ 2 billion. Swiss Re Institute says the costliest event so far in 2018 came from a storm called Cyclone Friederike, a relatively small storm that caused huge destruction in Europe.
Germany and the Netherlands were worst hit, but the storm crossed through the United Kingdom, Belgium, and France. Total losses from this storm were US$2.7 billion, with insurance losses totalling US$2.1 billion.
In the United States, economic losses from several storms left economic losses of US$4 billion, US$2.9 billion in insured losses.
“We expect to see more extreme weather conditions, such as intense heatwaves and dry spells of the like we’ve seen over the last few weeks,” said Martin Bertogg, head of catastrophe perils at Swiss Re. “This may well become the new normal. According to scientific climate models, temperature and atmospheric humidity will increase in many parts of the world, and at the same time also become more volatile. We will experience more variable rain patterns and severe droughts – and in consequence raging wildfires. Accelerating urbanization and the ongoing expansion of dwellings in natural forest areas will considerably exacerbate this loss potential. Society will need to adapt and prepare for these increasing occurrences.”