Perils vs insurance
Reinsurance intermediary Aon Benfield’s catastrophe model development team Impact Forecasting today launched its 2016 Annual Global Climate and Catastrophe Report, which evaluates the impact of the natural disaster events that occurred worldwide during the last 12 months to promote awareness and enhance resilience.
According to the report, there were 315 natural catastrophe events in 2016 that generated combined economic losses of US$210 billion. The top three perils—flooding, earthquake and severe weather—comprised 70 per cent of all economic losses in 2016. While at least 72 per cent of catastrophe losses occurred outside of the US, it still accounted for 56 per cent of global insured losses.
Overall, just 26 per cent ($54 billion) of overall economic losses were covered by insurance in 2016, due to a higher percentage of damage occurring in areas with a lower insurance penetration. However, the public and private insurance industry losses were seven per cent above the 16-year average and the highest insured loss total since 2012.
The report found that a series of April earthquakes in Japan was the costliest event for the insurance industry ($5.5 billion). Six of the top 10 costliest insured loss events occurred in the US, including Hurricane Matthew and multiple severe weather outbreaks. Furthermore, a notable entry into the top five insured losses was for a ‘secondary’ peril – wildfire – in Fort McMurray, Canada, that cost the industry nearly $3.0 billion.