Global natural disasters in 2015 caused a combined total insured loss of $35 billion – 31 percent below the 15-year average of $51 billion and the lowest annual insured loss total since 2009, said a report issued by Impact Forecasting, Aon Benfield’s catastrophe model development team.
The report reveals that these losses were caused by 300 separate global natural disasters, compared with the 15-year average of 269 events.
The costliest event for insurers was a February winter storm that affected much of the eastern United States and resulted in public and private insurance payouts of more than $2.1 billion, said Impact Forecasting’s Annual Global Climate and Catastrophe Report.
Conversely, economic losses from natural catastrophes in 2015 stood at $123 billion – 30 percent below the 15-year average of $175 billion, the report added.
“There were 14 multi-billion dollar economic loss events around the world, with the costliest being forest fires that burned out of control in Indonesia,” the report said, citing figures from the World Bank that the $16.1 billion economic loss from the fires represented 1.9 percent of the country’s GDP.
Warmest Year on Record
Meanwhile, 2015 replaced 2014 as the warmest year since the recording of global land and ocean temperature began in 1880, the report said.
“Global insured property catastrophes in 2015 accounted for just 28 percent of economic losses, in line with the 10-year average of 29 percent,” said Stephen Mildenhall, chairman of Aon Analytics.
“In many regions, economic catastrophe losses are very material relative to national GDP and yet are insured at much lower levels than in the United States and Europe,” he said.
“Of our top five economic losses, four occurred outside the United States and yet none of these was a top 10 insured loss, owing to low insurance penetration in the affected countries,” Mildenhall went on to say.
“With its abundant capital and sophisticated risk management tools, the industry should drive its own growth by better delivering on its core mission of providing critical risk transfer products to enable stable economic development in all regions of the world,” he emphasized.
The study revealed that the three costliest perils – flood, severe thunderstorm, and wildfire – accounted for 59 percent of all economic losses last year.
The deadliest event of 2015 was the magnitude-7.8 earthquake and subsequent aftershock that struck Nepal in April and May. These events killed more than 9,100 people and cost the nation and surrounding countries an estimated $8.0 billion in damage and reconstruction, the report said.
“While a notable uptick in recorded natural disaster events did not directly translate to greater financial losses in 2015, the year was marked by 31 individual billion-dollar disasters, or 20 percent more than the long-term average,” said Steve Bowen, associate director and meteorologist at Impact Forecasting.
“For just the fourth time since 1980, there were more than 30 such events in a year,” he said, noting that Asia once again incurred the greatest overall economic losses, at 50 percent of the world total and four of the five costliest events.
“Despite 32 percent of global economic losses occurring in the United States, it accounted for 60 percent of the insured loss and seven of the top 10 costliest insured events,” Bowen continued.
The strongest El Niño in decades had affected global weather patterns during the second half of year, leading to “costly flood, tropical cyclone and drought events,” he said. “These impacts will linger into the first half of 2016, and ironically enough, we could be discussing impacts from La Niña at this time next year.”
By the end of 2015, the United States had extended its record to 10 consecutive years without a major hurricane landfall, the report revealed.
While 32 percent of catastrophe losses occurred inside of the United States, the country accounted for 60 percent of global insured losses, the report said, which highlighted the high level of insurance penetration.
The top 10 insured loss events in 2015 comprised five severe thunderstorm outbreaks in the U.S., one winter storm in the U.S., one European windstorm, one Indonesian forest fire, and one U.S. drought, the Impact Forecasting report explained.
No region of the world sustained aggregate insured losses above its 15-year average in 2015; though EMEA, Asia Pacific and the Americas (non-U.S.) were all above their respective medians.
Source: Aon Benfield