News Non-Life17 Aug 2018

World:Catastrophes cause global economic losses of US$36bn in 1H

| 17 Aug 2018

Global economic losses from natural catastrophes and man-made disasters in the first half of 2018 stood at $36bn, according to Swiss Re Institute's preliminary sigma estimates.

This figure is well below the 10-year average of $125bn in economic losses and significantly lower than the losses reported for the same period a year earlier. Of the total global economic losses in the first half of 2018, $20bn were covered by insurance.

A series of winter storms in Europe and in the US caused the largest losses in the first half of 2018. Globally, around 3,900 people lost their lives or went missing in disaster events during the first six months of 2018, compared to approximately 4,600 for the same period in 2017.

Of the $36bn in total global economic losses, Nat CAT accounted for the majority, or $34bn in the first half of 2018, compared to $58bn in 1H2017. The remaining $2bn of losses were caused by manmade disasters.

Global insured losses from natural catastrophes fell to $18bn in 1H2018 from $25bn in the corresponding period the year before, while insured losses from man-made disasters decreased to $2bn in the first six months this year from $5bn in the first half of 2017. Nearly 56% of all global economic losses were insured as most disastrous events occurred in areas with high insurance penetration.

Winter storm Friederike in Europe was the costliest event in the first half of 2018 with insured losses of $2.1bn.

Higher losses may still lie ahead for 2018

This year, already in the first half, several parts of the world have been in the grip of heatwaves and severe dry weather conditions, triggering major wildfire outbreaks in California and Greece, and causing widespread drought across Europe and southern Australia.

Numerous regions are exposed to above average temperatures and drier weather conditions. Southern Australia, for example, is experiencing its second driest autumn on record according to the Australian Bureau of Meteorology. Losses from droughts in the agriculture sector and from wildfires are yet to be determined.

Mr Martin Bertogg, Head of Catastrophe Perils at Swiss Re, said, "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. 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."

He added, "We will experience more variable rain patterns and severe droughts and in consequence raging wildfires. Accelerating urbanisation 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."


 

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