Reflecting on the overall insurance industry losses for the year, BMS Group has revealed that worldwide insurance industry losses for 2023 should end up below the modeled average annual loss suggested by Verisk Annual Global Modeled Catastrophe Losses of $133 billion.
While there is still some loss development from recent severe weather events from around the world, such as the recent severe weather and flooding in Australia and Argentina and winter storms in the US, overall, BMS Group highlighted how it appears that the US insurance industry losses will end up below $65 billion across all perils.
The specialist insurance and reinsurance broker stated that this amount is just above normal at 108% above the 10-year average US loss, but only 94% above the five-year average annual US loss.
Importantly, US insurance losses usually tend to drive around 64% of the worldwide overall insurance industry losses experienced in any given year.
The company explained that it remains clear that across 2023, US severe weather was the “driver of losses,” which are just over double the 10-year average annual loss of $26 billion.
As a result, these have led to a record year for severe weather losses across the US and a “pain point” for many insurers.
On a positive note for the insurance sector, the US landfalling hurricane season in terms of losses was a lot more tamer compared to the last five seasons, which has seen US hurricane losses being a major driver of overall worldwide loss.
BMS Group noted however, that this year there are still questions that remain in regards to how impactful Hurricane Idalia – which made landfall on August 30 as the season-only major hurricane landfall – will be on the industry, with many industry loss estimates suggesting a loss range between $1 billion and $3 billion.
At the moment, the Florida Office of Insurance Regulation is reporting only a loss of $309 million to date.
According to BMS Re’s analysis, Idalia is likely be the lowest loss ever to have been experienced by the insurance industry for a hurricane of its magnitude.
