For all perils, the US accounted for 76% of all global insured losses. Thunderstorms in Europe during June also brought a billion-dollar insurance bill to parts of Germany and France
“Governments and private organizations are accelerating their investments to help ensure the world is proactively prepared to handle our quickly evolving physical and non-physical hazard-related challenges. Climate change is often discussed in future tense, but we are already seeing more evidence of its effects today,” cautioned Gallagher Re Chief Science Officer Steve Bowen
London:
Led by US thunderstorms and global impacts from El Niño’s arrival, total direct economic losses from natural hazards for the first half of the year were preliminarily estimated at USD138 billion, according to global reinsurance broker Gallagher Re’s H1 2023 Natural Catastrophe Report, published today.
The cost covered by private insurance or public insurance entities tallied USD52B. This marked a protection gap of 63% (USD86B).
The H1 totals for solely weather / climate events (excluding earthquakes or other non-atmospheric-driven perils) were USD92B (economic) and USD46B (insured). These totals, which may be rounded in some cases, are subject to change as loss development occurs and new data is obtained in the weeks and months ahead.
The first six months of 2023 featured above-average natural catastrophe losses as the National Oceanic and Atmospheric Administration (NOAA) and the World Meteorological Organization (WMO) declared the official arrival of El Niño, which is poised to have further influence on global weather / climate events through the end of the year.
The severe convective storm (SCS) peril was highly dominant for the insurance industry in H1 2023. A very active pattern led to prolific series of widespread outbreaks across the United States that resulted in at least USD34B in insured losses.
It was expected that continued loss development could push 2023 past 2011 as the costliest on H1 record for US SCS insured losses.
For all perils, the US accounted for 76% of all global insured losses. Thunderstorms in Europe during June also brought a billion-dollar insurance bill to parts of Germany and France.
Overall, the total preliminary H1 insured loss was 18% higher than the decadal average (USD44B) and 39% above the 21st Century average (USD38B).
Gallagher Re Chief Science Officer Steve Bowen said: “The physical risks associated with natural hazards, and the financial and human costs associated with these events, continue to grow. We witnessed a series of significant events during the first half of 2023 that puts further spotlight on the need to close the protection gap by better preparing for the increasingly consequential events that the world continues to endure.”
The arrival of El Niño brings the potential for even more global disruption and impacts from weather and climate events through at least the rest of the year.
While El Niño historically causes the globe to become warmer and leads to more volatile weather patterns, the ongoing influence from climate change will only amplify associated impacts to life and property. To put it simply, extreme weather / climate events are anticipated to become more severe, he said.
“Governments and private organizations are accelerating their investments to help ensure the world is proactively prepared to handle our quickly evolving physical and non-physical hazard-related challenges. Climate change is often discussed in future tense, but we are already seeing more evidence of its effects today,” cautioned Bowen.