In terms of economic losses resulting solely from weather disasters, 2017 became the costliest year ever recorded at $344 billion or 97% of total economic losses, according to Impact Forecasting, Aon Benfield's catastrophe model development team.
Overall, there were 330 natural catastrophe events in 2017 that generated total economic losses of US$353 billion. This was just the second year on record to ever surpass $300 billion on an inflation-adjusted basis, joining 2011 with losses of $486 billion.
In its “Weather, Climate & Catastrophe Insight: 2017 Annual Report”, which evaluates the impact of the natural disaster events that occurred worldwide during 2017, Aon Benfield notes that the major weather events included Hurricanes Harvey, Irma and Maria in the US and Caribbean, plus Typhoon Hato in China and Cyclone Debbie in Australia.
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. This is 139% higher than 2016’s $56 billion, primarily due to high insurance penetration in the US that suffered a very active Atlantic hurricane season, severe weather events (convective storms) and wildfires.
Mr Eric Andersen, CEO of Aon Benfield, said: “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. 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.”
Additional key findings include:
- 36% ($80 billion) of economic damage from Hurricanes Harvey, Irma and Maria was insured; the three storms were the world's biggest weather events last year and caused an estimated $220 billion in damage, representing 62% of 2017’s annual economic loss. In more detail, insured losses amounted to $30 billion for Hurricane Harvey, $27 billion for Maria and $23 billion for Irma
- There were 31 billion-dollar events globally, with 16 alone in the US
- Wildfires caused $14 billion of insurance losses in 2017 – the highest on record for the peril
- An October wildfire outbreak, the most destructive ever recorded in the US state of California, caused nearly $13 billion in economic damage
- Substantial summer flooding causing more than $12 billion in damage across China
- 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.