First half of 2015 recorded below-average global natural disaster losses.
The first half of 2015 experienced global natural disaster losses below the 10-year (2005-2014) and 15-year (2000-2014) averages from both the economic and insured loss standpoint.
Preliminary Q1/Q2 global natural disaster losses data from Aon Benfield revealed $46 billion in economic losses, a 58% drop from the 10-year average of $107 billion.
Insured losses were recorded at $15 billion, a 47% decline from the 10-year average of $28 billion and down 34% from the 15-year average of $23 billion.
[Related: North American insured Cat losses total $8B so far in 2015]
Global economic losses covered by both private and government-sponsored insurance was 31%, slightly above the 10-year average of 27% due to the majority of losses occurred in regions with higher insurance penetration.
Contrastingly, approximately 2% of the multi-billion-dollar economic loss caused by the Nepal earthquake had insurance coverage. This kind of data show the role catastrophe models play in helping the insurance industry better understand these risks and seek ways to grow insurance penetration in underserved regions.
49% of insured losses from thunderstorms
The costliest disaster type during the first half of 2015 was the thunderstorm peril, which encompassed 33% of the economic loss and 49% of the insured loss. The U.S. racked up most of the costs from severe damages during the months of April, May and June, resulting from strong convective thunderstorm occurrences that triggered widespread hail, damaging straight-line winds, tornadoes and disastrous flash flooding.
From an economic loss perspective, the costliest natural disaster was the major Nepal earthquake on April 25 that registered a magnitude of 7.8. Subsequent aftershocks in May that devastated Nepal also contributed. An estimated $10 billion was required to cover total damage and reconstruction costs throughout the areas impacted by the earthquake. The major flash flood and severe thunderstorm event that impacted the U.S. during the second half of May was recorded as the second-costliest event.
U.S. had 73% of insured losses
A combination of an active winter season and countless convective storm events positioned the U.S. with the majority of insured losses, representing 73% of global losses sustained by public and private insurance entities. Asia Pacific followed with 14% of the insured loss, and Europe, the Middle East and Africa sustained 11% of the insured losses. 2011 still holds the record for all-time first-half losses at $92 billion.
[Related: Top 10 most costly insured natural catastrophe losses in 2013]
"The first half of 2015 was the quietest on an economic and insured loss basis since 2006. Despite having some well-documented disaster events in the United States, Asia Pacific and Europe, it was a largely manageable initial six months of the year for governments and the insurance industry," said Steve Bowen, associate director and meteorologist with Aon Benfield's Impact Forecasting team. "Looking ahead to the rest of 2015, the continued strengthening of what could be the strongest El Nino in nearly two-decades is poised to have far-reaching impacts around the globe. How that translates to disaster losses remains to be seen, but something to keep a close eye on in the coming months."
View the full Impact Forecasting June 2015 Global Catastrophe Recap report.
View the video presented by the report's author Steve Bowen.
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|Publication:||Property and Casualty 360|
|Date:||Jul 27, 2015|
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