Disasters in 2017 costliest on record
According to Aon Benfield’s Weather, Climate and Catastrophe Insight: 2017 Annual Report, 2017 was the costliest year on record for weather disasters, with US$344 billion of loss being recorded globally. The report, created by Aon Benfield’s catastrophe model development team Impact Forecasting, recorded 330 natural catastrophe events last year. Though total loss for these events stands at US$353 billion, 97 per cent were due to weather disasters – including high-profile events such as Hurricanes Harvey, Irma and Maria in the US and Caribbean, plus Typhoon Hato in China and Cyclone Debbie in Australia. The losses for 2017 represented a huge 93-per-cent increase on the average loss figure for between 2000 and 2016.
According to Aon Benfield’s Weather, Climate and Catastrophe Insight: 2017 Annual Report, 2017 was the costliest year on record for weather disasters, with US$344 billion of loss being recorded globally. The report, created by Aon Benfield’s catastrophe model development team Impact Forecasting, recorded 330 natural catastrophe events last year. Though total loss for these events stands at US$353 billion, 97 per cent were due to weather disasters – including high-profile events such as Hurricanes Harvey, Irma and Maria in the US and Caribbean, plus Typhoon Hato in China and Cyclone Debbie in Australia. The losses for 2017 represented a huge 93-per-cent increase on the average loss figure for between 2000 and 2016.
Losses to the private sector and government-sponsored programmes were also high at around $134 billion, according to the report, though not the highest on record – 2011 incurred $137 billion. However, this figure still represents a 156-per-cent increase on 2016’s figure of $56 billion.
There were 31 billion-dollar events worldwide in 2017, a figure that shows just how destructive natural disasters were last year. This is compounded by the fact that 16 of these took place in the US. Of the events that had the largest impact on the US last year – Hurricanes Harvey, Irma and Maria – 36 per cent of damage was insured, representing $80 billion.
Eric Andersen, CEO of Aon Benfield, commented: “While 2017 was an expensive year for the insurance industry, the reinsurance market had an estimated US$600 billion in available capital to withstand the high volume of payouts. Most critically, the US weather and wildfire events, in particular, have demonstrated the value of reinsurance, with claims being paid in an average of eight days to augment the recovery process.”
Some of the year’s other most significant events included: wildfires in California, US in October causing nearly $13 billion in damage; flooding in China costing $12 billion; drought in parts of Spain, Italy and Portugal costing $6.6 billion; thunderstorms over central Europe costing $800 million; and two earthquakes in Mexico in September causing $6 billion combined economic losses and damage costs.
Steve Bowen, Impact Forecasting Director and Meteorologist, added: “The high cost of disasters in 2017 served as a reminder that we continue to face increasing levels of risk as more people and exposures are located in areas that are particularly vulnerable to major, naturally occurring events. As weather scenarios grow more volatile in their size and potential impact, it becomes more imperative than ever to identify ways to increase awareness, improve communication, and lower the insurance protection gap. We know natural disasters are going to occur. The question is how prepared are we going to be when the next one strikes.”