Total global economic losses from natural and man-made disasters in 2017 were USD 337 billion, almost double the losses in 2016 and the second highest on record, the latest sigma study from the Swiss Re Institute says.Global insured losses from catastrophe events, meanwhile, were USD 144 billion, the highest-ever recorded in a single year.
North Atlantic hurricane seasons remain active
The highest losses came from three hurricanes – Harvey, Irma and Maria (HIM) – that struck the US and the Caribbean in quick succession. These hurricanes resulted in combined insured losses of USD 92 billion, making 2017 the second costliest North Atlantic hurricane season since 2005.
"After 12 years of no major hurricane making US landfall, 2 2017 is likely to go down as one of the most expensive North Atlantic hurricane seasons in history, in terms of both economic and insured losses," Martin Bertogg, Head of Catastrophe Perils at Swiss Re says.
The North Atlantic seems to still be in an active phase of hurricane activity, suggesting a higher probability of hurricane formation and major hurricanes making landfall. "A key take away from HIM is that insurers need to consider multiple hurricanes occurring in a given year, as much as the severity of individual events, in their modelling of hurricane risk. This is important from a risk management perspective as it will help insurers – and, ultimately society – be better prepared for similar magnitude events in the future," Bertogg says.
Major wildfires across the globe resulted in combined insurance losses of USD 14 billion, the highest ever. In terms of sigma criteria, there were 301 catastrophes worldwide in 2017, down from 329 in 2016. More than 11 000 people lost their lives or went missing in disaster events last year, and millions were left homeless.
A record year for wildfire losses
Global losses from wildfire events have increased over recent decades, and there were many major fires in 2017. The combined insurance losses from all wildfires worldwide were USD 14 billion, the highest ever in a single year. In October and December 2017, separate wildfire outbreaks led to record losses of USD 13 billion across northern and southern California.
The Tubbs fire in the Sonoma and Napa counties caused USD 7.7 billion in insured losses, making it the world's costliest wildfire ever in terms of insured losses, according to sigma records.
So far the biggest wildfire-related insured losses globally have resulted from outbreaks in the US and Canada. This has come alongside an observed increase in the length of wildfire seasons (longer and warmer summers), and the occurrence of more frequent wildfire events. In North America, the increase in wildfire risk is fueled by strongly growing exposures
Heavy flooding events caused high losses
There were also a number of severe precipitation events in 2017, in different regions. These highlighted the vulnerability of an increasingly urbanised world to flood events.
In China heavy rains caused the Yangtze River to flood, with pluvial and river flooding across 11 provinces inundating more than over 400 000 homes. The economic losses were estimated to be USD 6 billion, making it the costliest loss disaster event in 2017 in Asia. With low insurance penetration, however, the level of coverage was small.
In the monsoon season. very heavy and long-running rains caused huge damage and loss of life in India, Nepal and Bangladesh. Economic losses from a series of flood events in Bihar, Assam, West Bengal and other states in India were around USD 2.5 billion, and USD 0.6 billion in the Terai region of Nepal.