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PRESS RELEASE: Swiss Re (This is an abridged version. Read the full release)
Zurich, 20 December 2017 - Preliminary sigma estimates for insured global losses resulting from natural and man-made disasters in 2017 are around USD 136 billion, well-above the annual average of the previous 10 years, and the third highest since sigma records began in 1970. Total economic losses soared in 2017 to USD 306 billion from USD 188 billion in 2016. The accumulation of economic and insured losses ramped up in the second half of the year, due primarily to the three hurricanes - Harvey, Irma and Maria - that hit the US and the Caribbean, and wildfires in California. Globally, more than 11 000 people have died or gone missing in disaster events in 2017, similar to 2016.
Total economic losses from natural catastrophes and man-made disasters are estimated to be USD 306 billion in 2017, up from USD 188 billion in 2016 and much more than the annual average of the previous 10 years (USD 190 billion). Global insured losses from disaster events in 2017 were around USD 136 billion, up from USD 65 billion in 2016, well above the previous 10-year annual average (USD 58 billion), and the third highest on sigma records. Natural catastrophes accounted for USD 131 billion of this year's insured losses1, and man-made disasters for the remaining USD 5 billion. More than 11 000 people have died or gone missing in catastrophe events, similar to 2016.
"In recent years, annual insurance losses from disaster events have exceeded USD 100 billion a few times", says Martin Bertogg, Head of Catastrophe Perils at Swiss Re. "The insurance industry has demonstrated that it can cope very well with such high losses. However, significant protection gaps remain and if the industry is able to extend its reach, many more people and businesses can become better equipped to withstand the fallout from disaster events."
A year of two halves
Extreme weather in the US in the second half of 2017 has been the main cause of the high number of full-year insured losses. In the first half, the losses resulting from disaster events were lower than in the same period of 2016, and well below the annual six-month average of the previous 10 years.
In August and September, three category 4+ hurricanes - Harvey, Irma, and Maria (HIM) - made landfall in the US. Destruction from the three hurricanes stretched from the Texas coast (Harvey) through West Florida to the Caribbean (Irma and Maria), together causing insured losses estimated to be almost USD 93 billion2 . Given the vast geographic footprint of the hurricanes, which affected multiple locations in quick succession and impacted multiple lines of business, a full assessment of the insured losses is still ongoing. The economic losses from the three events will be much higher given the significant flood damage - often uninsured - from hurricane Harvey in densely populated Houston, Texas, an extended power outage in Puerto Rico after hurricane Maria, and post-event loss amplification.
After 12 years with no major hurricane3 making US landfall, HIM have made 2017 the second costliest hurricane season on sigma records after 2005. "There has been a lull in hurricane activity in the US for several years", says Kurt Karl, Swiss Re's Group Chief Economist. "Irrespective, there has been a significant rise in the number of residents and new homes in coastal communities since Katrina, Rita and Wilma in 2005, so when a hurricane strikes, the loss potential in some places is now much higher than it was previously."