CRESTA, the insurance industry organisation that provides a global standard for risk accumulation zones and industry losses, has found that major insurance losses from catastrophes were well below average in 2020.
CLIX, the CRESTA Industry Loss Index, provides industry loss data on international catastrophe events (excluding US) which have generated industry losses in excess of $1 billion.
For 2020, CLIX is currently tracking seven cat events that generated a combined industry loss of $9.4 billion, a figure well below the long-term annual average of $16.2 billion.
And according to CRESTA, this benign international cat loss activity continued into Q1 2021 with only two events outside the US categorised as having the potential to exceed a $1 billion industry loss.
These include the Fukushima Mw7.0 Earthquake which occurred in Japan in February and the floods and storms which affected the Australian states of New South Wales and Queensland in March.
However, it’s worth noting that other industry estimates actually put the insured cost of catastrophes at higher than average in 2020 due to the impact of smaller scale secondary perils, which are not included in the CLIX index.
Matthias Saenger, Technical Manager of CLIX, commented: “These results illustrate the actuarial analysis potential created by the CLIX Loss List, including the technical pricing of industry-loss-based risk transfer products.”
“With our latest update, the list now contains 21 years of well-structured and independent industry loss data. Losses can be analysed by geography, time, or natural peril, with the insights gained applied to pricing and reserving activities, as well as capital management and reinsurance or retrocession buying,” Saenger continued.
“We are extremely pleased with the positive response from the global re/insurance industry to the establishment of CLIX. It is clear that there is strong demand in the marketplace for an independent source of well-structured and regularly updated industry Cat loss data.”