A report by Munich Re has revealed fewer severe natural disasters across the first-half of 2018 saw overall losses fall to its lowest level since 2005, with insured losses down from 2017, while stressing that the later months may yet prove costly.
The $33 billion total losses were roughly half those of the previous year and of the price-adjusted average for the last 30 years, at $65 billion and $68.3 billion respectively.
Additionally, despite 430 natural disasters registered, up from 380 in 2017, insured losses stood at approximately $17 billion, down from $25 billion in the previous year and more-or-less average for the first six months over the last 30 years.
“Following a period of extreme disasters with record losses, it is nice to be able to record a phase with low losses. Of course, looking at a short timespan may distort the true picture,” explained Munich Re Board member, Torsten Jeworrek.
Munich Re estimated some 3,000 fatalities from natural disasters in the first half of 2018, a lower figure than the 5,540 for the corresponding period last year and substantially lower than the long-term average of 28,000.
Overall losses from Storm Friederike, which swept across the United Kingdom, northern France, the Benelux states and Germany in mid-January, came to $2.7 billion, of which $2.1 billion were insured, reflecting the high insurance density of windstorm cover in Europe.
In total, H1 2018 winter losses in Europe came to $4.8 billion, of which $3.6 billion was insured. The winter in North America caused overall losses totalling $3.8 billion and insured losses of $2.7 billion.
“The most important thing is to understand the long-term developments,” continued Jeworrek. “That is why we must continue to make every effort to understand the background to natural disasters, and provide safeguards against them in the form of intelligent prevention measures. This is borne out by statistics on flooding losses in Europe, which have generally decreased thanks to investment in flood protection and control.”
Munich Re also highlighted the unusual weather pattern that developed in central Europe in May and early June resulting in flooding caused by torrential rainfall. Overall losses from the storms came to around $1.8 billion, with insured losses of at least $1 billion
Ernst Rauch, Chief Climate and Geo Scientist at Munich Re, said, “Although individual events like these cannot be attributed to climate change, climate model studies show that one future effect of the increase in temperature will be more frequent periods of heat and drought, along with more intensive convective rainfall. So these weather processes roughly fit the pattern that may be expected more frequently in future as a consequence of climate change.”
Despite both economic and insured losses in the first-half of the year being less than both 2017 and the historical average, insurers and reinsurers will have the 2017 Atlantic hurricane season fresh in their minds, and will be keeping a close eye on catastrophe activity throughout the remainder of the year.