NEW YORK (NYTIMES) - Insurers are set to pay out a record US$135 billion (S$179.4 billion) to cover losses from natural disasters in 2017, the world's largest reinsurer said on Thursday (Jan 4), driven by the costliest hurricane season ever in the United States and widespread flooding in South Asia. The German reinsurer Munich Re, in its annual natural catastrophe review, also said that last year's total losses, including those not insured, were $330 billion, the second-worst in history after 2011 when an earthquake and tsunami wreaked havoc in Japan. German reinsurer Munich Re (MUVGn.DE), in its annual natural catastrophe review, also said last year’s total losses, including those not insured, were $330 billion, the second-worst in history after 2011 when an earthquake and tsunami wreaked havoc in Japan. Pattern of Extreme Weather Expected

“…[S]ome of the catastrophic events, such as the series of three extremely damaging hurricanes, or the very severe flooding in South Asia after extraordinarily heavy monsoon rains, are giving us a foretaste of what is to come,” said Torsten Jeworrek, Munich Re board member responsible for global reinsurance business. “Because even though individual events cannot be directly traced to climate change, our experts expect such extreme weather to occur more often in future.”

Abundance of Capital

While the reinsurance industry had hoped the relentless soft market would be alleviated by last year’s expensive catastrophes, rate increases were relatively measured during the January renewals — mostly as a result of the abundance of reinsurance capacity provided by capital market investors backing insurance linked securities (ILS).
Munich Re reports that the insurance industry faces record claims of US$135 billion from natural catastrophes, such as the Mexico earthquakes, South Asian floods, California wildfires and Atlantic hurricanes in 2017. Overall economic losses from natural disasters are estimated at the second highest amount since 2011.