The severe flooding in July across Western Europe is believed to be the costliest insurance and reinsurance industry loss event outside of the U.S. in 2021, costing carriers an estimated $12 billion, according to CRESTA.
The latest quarterly update for 2021 of the CRESTA Industry Loss Index (CLIX), which provides loss data on international catastrophe events (non-US) which have generated industry losses in excess of $1 billion, shows that the flooding in July was the most significant loss event of the year.
CRESTA currently estimates that this catastrophe event has generated an industry loss of $12 billion, which is up from its initial $11 billion estimate produced three months ago.
However, the $12 billion total does not include insured losses funded by the regional governments in Belgium, which totalled $1.2 billion.
Overall, 2021 was an above-average year for catastrophe activity for insurers and reinsurers. And, while the number of international catastrophe events exceeding $1 billion in 2021 is not unusual, the accumulated loss of $21.6 billion is higher than the long-term average of $13.7 billion.
What’s more, most of these losses were driven by extreme precipitation events during the summer, which generated huge masses of water within comparatively short time periods, says CRESTA.
The organisation warns that these kind of events could become more common as a result of higher temperatures and increased water-holding capacity in the atmosphere, coupled with the use of impenetrable surface materials for urban developments and infrastructure construction.
As well as the severe mid-July flooding in Europe, other major cat events in 2021 included the heavy snowfall in Japan in January and the Fukushima earthquake in the country in February.
Elsewhere, Europe was hit by severe convective storms in June, while China’s Henan province experienced devastating floods in July. A heavy rainfall event brought damage to Japan in August, while severe storms hit Australia in October, and floods impacted British Columbia in November.
More recently, CRESTA highlights the impacts of Typhoon Rai in the Philippines and flooding in Malaysia.
Of these events, CRESTA says that the Fukushima earthquake, the June storms in Europe and the Henan floods in China have each drove insured losses of above $1 billion, resulting in a total industry loss of $9.6 billion.
Matthias Saenger, Technical Manager of CLIX, said: “With the ever-changing risk landscape driven by a changing climate and growth in insured assets, understanding the past is a key part of detecting trends in the frequency and severity of major natural catastrophe events.
“CRESTA CLIX provides a consistent and coherent industry loss history which can be used for this purpose, and we are delighted to see the growing adoption of CLIX by the insurance and reinsurance market. This serves to motivate us to continue our work in 2022 and we thank all our subscribers for their support.”