Gallagher Re has revealed that insured losses from major catastrophes in 2021 have so far reached $116bn, which the broker said was the third largest in ten years.
The figure was also reported by the reinsurance broker to be 63% higher than the average annual loss since 2011. Like the peak insured natural-catastrophe loss years of 2017 ($143 billion) and 2011 ($120 billion), multiple events are responsible for the large losses, according to the Summary of Natural Catastrophe Events 2021, published today by the company.
Gallagher Re estimated that 35% of the loss was caused by tropical cyclones, followed by severe thunderstorms at 25%. The largest single loss event was Hurricane Ida in August, which cost insurers roughly $37bn.
Yingzhen Chuang, regional director of international catastrophe analytics at Gallagher Re, said: “With the large loss experience in 2021, catastrophe models are firmly in the market’s headlights. They remain pivotal to enabling conversations around pricing adequacy, secondary perils, climate change, and systemic connectivity of risk, but it has become essential to ensure we understand what models can and cannot contribute to the conversation.”
She added: “By necessity, summarising a complex global picture requires some simplifications. However, it is clear that carefully contextualising global loss experience is essential to an industry founded on managing volatility and uncertainty.”
The largest insured losses from a single event in 2021, reports Gallagher Re, came from Hurricane Ida in August, with $37bn in all property-insured losses. In Europe, it was Storm Bernd in mid-July that caused flooding in Germany and Belgium totalling more than $13bn in losses.
Elsewhere around the world, wrote Gallagher Re, “The events drawing the most attention in Asia were the thunderstorms that affected the Province of Henan in China, while in Latin America and the Caribbean, the highlight of the year was the absence of significant individual events causing large insured losses.”
Most worryingly, the insured losses for 2021 were the third highest on record since 2011, second after 2017. But according to Gallagher Re’s statistics, the average insured losses have been trending upwards, from an average between 2012 and 2016 of $38.1bn, but averaging $81.875bn for the years 2018, 2019, 2020, and 2021.