Munich Re has estimated that insured losses resulting from natural catastrophes totalled $15 billion in the first half of 2019, slightly below the long-term average of $18 billion.
The reinsurer recorded 370 loss events over the first six months of the year, which it believes produced an overall economic loss of $42 billion, compared with the 30-year average of $69 billion.
Analysts noted that, at around 36%, the insured portion of the global economic loss was relatively small due to low insurance penetration in many of the affected countries.
Three of the five costliest disasters during the period affected emerging and developing countries, including a flood disaster in Iran (economic losses of US $2.5 billion), and storm and flood losses from Cyclone Fani in India and Bangladesh in May ($2.2 billion).
Mozambique, one of the world’s poorest countries, was also hit particularly hard, with Cyclone Idai making landfall near the port of Beira in March and Cyclone Kenneth arriving a few weeks later further north.
Overall losses in Mozambique and neighbouring countries totalled more than $2 billion, and represented around one tenth of Mozambique’s GDP.
“When looking at the first half of 2019, disasters in poorer countries are worrying because the victims so often have virtually no insurance cover,” said Torsten Jeworrek, a member of the Board of Management at Munich Re.
“Cyclone Idai, which hit Mozambique, was in relative terms worse for that country than the Tohoku earthquake – the costliest natural disaster on record – was for Japan in 2011,” he continued. “Almost nothing was insured, so that very few of the people affected were able to obtain prompt financial assistance for the loss of their belongings.”
“Experience has shown that such countries often take years to recover from disasters. The insurance industry therefore needs to promote partnerships with governments and development banks to provide greater assistance to countries like Mozambique.”
The other costliest events in H1 consisted of a series of thunderstorms and tornados in the US, which Munich Re estimates to have caused around $3.3 billion in economic damages, and $2.5 billion in insured losses.
The tornado season was considerably more active than usual, analysts noted, although aggregate losses over the six-month period only amounted to $7.5 billion, well below the $10 billion average for the past decade.
Munich Re’s estimates are notably lower than recent analysis by the Impact Forecasting team at Aon, who put insured losses in H1 2019 at $20 billion and economic losses at $73 billion.
Aon’s estimates were also based on a review of 163 catastrophe events, less than half the number factored in by Munich Re.
Part of the discrepancy can be attributed to Munich Re’s exclusion of the June flooding in China, which Aon pegged at around $6.1 billion in terms of economic losses.
Other noteworthy catastrophe events recorded by Munich Re over the first half of the year include heatwaves and drought conditions in Europe, combined with severe thunderstorms and violent hailstorms in June.
The Asia Pacific region was also impacted heavily by natural disasters, with flooding in Queensland, Australia estimated to have caused almost $2 billion in economic losses, half of which was insured.
