Global economic losses from catastrophes in the first-half of 2018 declined to $36 billion, year-on-year, with $20 billion, or 56% being covered by re/insurance, according to reinsurance giant Swiss Re’s preliminary sigma estimates.
The $36 billion economic loss total represents a decline of 44% from the $64 billion recorded by Swiss Re during the first-half of 2017, and is below the previous ten-year average of $125 billion.
The $20 billion insured loss total is also down on last year’s $30 billion total by 33%, and also below the previous ten-year average of $35 billion.
According to Swiss Re, the majority, or $34 billion of the total economic loss bill was driven by natural catastrophe events, with the remaining $2 billion coming from man-made disasters. Regarding natural catastrophes, this represents a decline of 42% from the same period last year, while the man-made portion also declined, year-on-year, by 62%.
The insured losses tell a similar story, with $18 billion of the $20 billion total coming from natural catastrophe events, and the remaining $2 billion coming from man-made disasters. When compared with the first-half of last year, insured natural catastrophe losses declined by 28% in H1 2018, while the man-made portion fell by 58%.
The costliest event during the first-half of the year was winter storm Friederike in Europe, which caused widespread damage and significant losses in Germany and the Netherlands, while also impacting parts of the UK, Belgium, and France.
Swiss Re puts the economic loss from the storm at $2.7 billion, stating that approximately $2.1 billion of this was covered by insurance.
Harsh winter conditions in the U.S. also contributed to the economic and insured loss bill during the first-half of this year, as parts of the states experienced severe snow, ice, freezing rains, and flooding. Swiss Re says the total loss bill from the series of U.S. storms resulted in economic losses of $4 billion, with $2.9 billion being covered by insurance.
The Nor’easter storm, which impacted the U.S. in March, was the largest loss for the re/insurance industry in the U.S., with claims of $1.6 billion.
Furthermore, the U.S., Europe and other parts of the world were impacted by a series of convective storms through the first six months of the year, with the most expensive for the insurance industry being a four-day spring storm that hit parts of south eastern U.S., driving combined insured losses of $1.1 billion, says Swiss Re.
“In addition, major volcanic eruptions in Hawaii and Guatemala, and earthquakes in Japan, Taiwan, and Papua New Guinea have caused damage and not yet fully determined insured losses,” explains Swiss Re.
According to the reinsurer, disaster events claimed the lives of 3,900 people in the first-half of the year, which is down from the 4,600 recorded for the same period last year, and also the lowest half-year total in more than three decades.
Despite both economic and insured losses being considerably down year-on-year and also significantly lower than the previous ten-year averages, a lot can change in the second-half of the year, with H2 2017 serving as a reminder that major catastrophe events are a matter of when, not if.
Swiss Re also highlights a series of intense droughts and severe wildfires in parts of the world, noting that losses from these events are yet to be determined.