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Global insured catastrophe losses 101% above long-term average: Jefferies

15th September 2021 - Author: Luke Gallin

Global insured catastrophe losses are running 101% higher than the long-term average (2008-2020) and more than 87% above the 10-year average, as Hurricane Ida adds an estimated USD 32.2 billion to the load in August, reports Jefferies.

hurricane-ida-louisianaExcluding Ida, analysis by Jefferies shows that year-to-date (Jan-Aug) losses are coming in 15% above the long-term average and 7% above the 10-year average.

In July, Jefferies reported that insured losses from catastrophes were running 41% above the long-term average, or 36% higher than the 10-year average. So, it’s clear that August, with the exception of Ida, was actually a fairly benign month in terms of cat activity.

But, of course, Ida did occur and brought devastation to Louisiana and surrounding areas before dumping record levels of rainfall in the northeast, with severe flooding hitting New York and New Jersey.

According to Jefferies, year-to-date losses in 2021 are already higher than in full-year 2018, 2019, and 2020, but remains below the level of losses seen in 2005, 2011, and 2017.

RMS

Analysts warned last month that above-average catastrophe losses were pressuring cat budgets for some carriers. With Ida estimated to have driven industry losses of more than USD 30 billion, Jefferies expects that reinsurance deductibles will be exceeded, resulting in a higher proportion of net losses falling on reinsurers.

In August, tropical cyclones were the main driver of above-average insured cat losses. While US severe weather losses, estimated at USD 1.7 billion for the month, remained the predominant peril during August, losses were in line with the average.

Jefferies attributes this to persistent thunderstorms, strong winds and several storms spreading across the Plains, Midwest, Mid-Atlantic, and Southeast regions.

Elsewhere in the world, Jefferies analysis shows that insured losses from catastrophes were broadly in line or below average.

“Looking ahead to September, the Atlantic windstorm season is underway, so tropical storm losses in North America should be expected,” say analysts.

cat-losses-jan-aug-2021-jefferies

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