Economic cost of natural disasters less than half 10-year average
Open-access content Friday 21st July 2017 — updated 5.50pm, Wednesday 29th April 2020
Global economic losses from natural disasters for the first half of 2017 are estimated at $53bn (£40.8bn) – 56% lower than the 10-year average of $122bn.
That is according to a new report from Aon Benfield, which reveals that insurers are set to pay out $22bn, with 76% of losses related to US events.
This was mainly due to severe convective storms, which were responsible for 78% of insurance losses, and 48% of total economic costs.
"The financial toll may not have been historic, but it was enough to lead to challenges for governments and insurers around the world," Aon meteorologist, Steve Bowen, said.
"This was especially true in the US after the insurance industry faced its second-costliest first half on record following a relentless six months of hail-driven severe weather damage."
The report shows the US recorded 76% of global losses sustained by public and private insurance entities so far this year, while the Middle East, Africa, Europe, and the Asia-Pacific accounted for 10%.
Around 4% occurred in the Americas, with the research also showing that 42% of economic losses were covered by insurance, above both the near and medium-term average of 32%.
This was mostly due to the fact that the majority of losses occurred in the US, however insurance take-up rates grew in other areas such as in the Asia-Pacific and the Americas.
Other than convective storms, Cyclone Debbie in Australia, flooding in China and Peru, wildfires in South Africa, and a series of windstorms in Europe also led to notable economic damage costs.
"As we enter the second half of the year, much of the focus will be on whether an El Niño officially develops. Such an event could have a prominent influence on weather patterns and associated disaster risks," Bowen added.
Aon's report also shows that natural disasters claimed at least 2,782 lives during the first half of 2017, but that this was the lowest figure recorded since 1986.
It was also significantly below the long-term average of 40,867 from 1980-2016, with flooding thought to have been responsible for a minimum of 1,806 deaths.
Sign up to our free newsletter here and receive a weekly roundup of news concerning the actuarial profession
This article appeared in our July 2017 issue of The Actuary.