Global economic losses from natural catastrophes and man-made disasters in the first half of 2020 were $75 billion, according to Swiss Re Institute's preliminary sigma estimates. That was up from $57 billion for the same period a year earlier, but well below the average of first-half economic losses of the previous 10 years ($112 billion). Of the economic losses, around 40 per cent ($31 billion) were covered by insurance. In the previous 10 years, first-half insured claims averaged $36 billion annually.
These sigma catastrophe loss estimates are for property damage, and exclude Covid-19-related claims. More than 2,000 people lost their lives or went missing in disaster events during the first half of this year. The main driver of the first half losses were secondary perils, with thunderstorms in North America playing a significant role.
In North America, severe convective storms (thunderstorms with tornadoes, floods and hail) caused insured losses of over $21 billion in the first half. This was the highest since the first half of 2011, when losses from this peril alone were around $30 billion. In June, Calgary in Canada suffered losses of $1 billion from hail damage, the costliest hailstorm event ever in Canada.
Starting from May, heavy rainfalls caused severe flooding, another example of secondary peril, in several provinces along the Yangtze River in China. Losses from fire events were mounting from the start of the year, given the 2019/2020 fire season in Australia, the longest (from September 2019 to February 2020) and most destructive ever.
Jerome Jean Haegeli, Swiss Re Group Chief Economist, said: "Around 60 per cent of natural catastrophe losses in the first half of 2020 were uninsured. As the severity of secondary perils will likely increase in the coming years, the importance of the insurance industry in closing natural catastrophe protection gaps is very clear. Climate change is a systemic risk and unlike Covid-19 it doesn't have an expiry date.”