2018 saw overall Nat CAT losses of $160bn which were above the inflation-adjusted average of $140bn for the last 30 years, says global reinsurance giant Munich Re.
The 2018 losses were however below the extremely high losses of 2017, which had totalled $350bn and were due mainly to record hurricane losses.
In a statement, Munich Re says that at $80bn, insured losses were substantially above the inflation-adjusted average for the last 30 years ($41bn), but below last year’s record figures ($140bn).
Around 10,400 people lost their lives in 2018 as a result of natural catastrophes. Compared with the average of 53,000 over the past 30 years, however, a decrease can be seen. This long-term trend is a clear indication that, from a global perspective, measures to protect human life are starting to take effect.
Mr Torsten Jeworrek, member of Munich Re’s board of management, said, “2018 saw several major natural catastrophes with high insured losses. These included the unusual phenomenon of severe tropical cyclones occurring both in the US and Japan while autumn wildfires devastated parts of California. Such massive wildfires appear to be occurring more frequently as a result of climate change. Action is urgently needed on building codes and land use to help prevent losses. Given the greater frequency of unusual loss events and the possible links between them, insurers need to examine whether the events of 2018 were already on their models’ radar or whether they need to realign their risk management and underwriting strategies.”
The deadliest disaster of 2018 was a seven-metre tsunami that took the Indonesian city of Palu by surprise on 28 September following an earthquake nearby. Thousands of buildings were destroyed and some 2,100 people were killed. A further tsunami hit coastal regions of Sumatra and Java – islands of Indonesia – on the evening of 22 December. The metre-high tidal wave is thought to have been caused by an underwater landslide triggered by an eruption of the Anak Krakatau volcano. Since existing tsunami early warning systems only respond to earthquakes, the metre-high wave caught inhabitants unawares. At least 400 people died.
The most expensive natural catastrophes last year occurred in the US. The costliest events were “Camp Fire”, a wildfire in northern California with overall losses of $16.5bn and insured losses of $12.5bn, and Hurricane Michael (overall losses of $16bn, and insured losses of $10bn).