Losses from natural catastrophes were globally heavy in 2018. Worldwide more than 68 million people were affected from catastrophes, in which more than 13.500 of them died.
Insured losses from catastrophe events globally were USD 85 billion in 2018, the fourth highest on Swiss Re (sigma) records. More than half of the total was the accumulation of losses from smaller and mid-sized secondary natural catastrophes.* The total was well below the peak loss years of 2017, 2011 and 2005, reflecting the absence of megaloss generating events. The combined insurance pay outs for natural catastrophe events in 2017 and 2018 were USD 219 billion, the highest ever for a consecutive two-year period.
Number of events: There were 304 catastrophes in 2018, the same as in 2017. Of those, 181 were natural catastrophes (184 in 2017), and 123 were man-made disasters.
Number of victims: Worldwide more than 13.500 people died or went missing in disaster events in 2018, one of the lowest totals in a single year on Swiss Re (sigma) records. Natural catastrophes claimed more than 9.800 victims, and man-made disasters resulted in roughly 3.600 deaths, up from around 3.000 in 2017.
According to the report on 2018 Overview of Disaster Events, prepared by Centre for Research on the Epidemiology of Disasters (CRED), more than 68.5 million people were affected from those natural disasters last year, in which 11.804 people died. The highest casualties from natural catastrophes occurred in Indonesia while the India was the country, in which people were affected most, due to those catastrophes.
Total economic losses: Total economic losses from disasters across the world were an estimated USD 165 billion in 2018, with around USD 155 billion resulting from natural catastrophes and the remainder from man-made events. The total was less than half that experienced in 2017 (USD 350 billion) and was below the inflation-adjusted average of USD 220 billion of the previous 10 years. The small losses of last year have indicated that there were not any significant disaster events. Catastrophe losses in 2018 were 0.19% of global gross domestic product (GDP), below the 10-year average of 0.28%.
Of that economic loss of USD 165 billion, a nearly just half (USD 85 billion) was insured. And the protection gap** was approximately USD 85 billion.
Regional loss overview: Mother Nature fired from all directions in 2018, unleashing severe weather events and earthquakes
across many regions. Tropical cyclones caused the highest insured losses. By region, the losses were highest in North America (around USD 53 billion), mostly coming from wildfires, thunderstorms and hurricanes. Asia, in particular Japan, was also hit by tropical cyclones and floods. Record heavy rains, a succession of typhoons and earthquakes hit the country, together resulting in insured losses of USD 17 billion. The aggregate EUR 8 billion (around USD 9 billion) in insured losses in Europe resulted different perils, including windstorms, flooding, cold/frost and, at the other end of the temperature scale, a summer heat wave.
Costliest insurance events of the year: Camp Fire in California in November was the world's costliest event of the year, resulting in insured losses of USD 12 billion (sigma). According to the Centre for Research on the Epidemiology of Disasters (CRED), an estimated total loss was USD 16.5 billion from those forest fires, in which 88 people died, and the event had the biggest loss ever recorded.
Next were Hurricane Michael and Hurricane Florence in the US; and Typhoon Jebi in Japan. According to the Centre for Research on the Epidemiology of Disasters (CRED), Hurricane Michael caused a loss of USD 16 billion, Hurricane Florence USD 14 billion, and Typhoon Jebi USD 12.5 billion.
Some observations from 2018
1. The year 2018 was the fourth costliest year for the industry ever.
(after 2005, 2011 and 2017)
2. Another number 4: According to the estimates, 2018 was the fourth warmest year on record.
3. Seventeen single events triggered insured losses of USD 1 billion or more last year.
4. High temperatures brought prolonged dry conditions. Insured losses from wildfires reached a new high for a second year running. The summer heat wave also led to severe drought conditions in central and northern Europe.
5. Other secondary perils of note in 2018 were precipitation-induced flooding. Hurricane Florence brought record rainfalls in both the Carolinas. According to CRED, Hurricane Florence resulted in a nearly USD 14 billion loss.
6. The total insured losses from natural catastrophe events in 2017 and 2018 were USD 219 billion, reflecting the highest ever for a consecutive two-year period. The previous two-year high (in 2018 prices) was 2011-2012, at USD 207 billion.
7. India, The Philippines, and China were the countries most affected due to last year's events while Indonesia, India, Japan, and Guatemala had the highest casualties due to natural disasters.
8. The protection gap** was approximately USD 85 billion.
If we would like to minimize such big losses resulting from disasters we should fight against climate change and global warming, learn how to manage the associated perils, and have a good grasp of the significance of insurance regarding the coverage of those losses.
*Secondary perils: Less-moderately severe loss events, occurring very often; eg., flooding, hurricane, drought, and forest fires, etc.
**Protection gap: Difference between the burning costs from natural disasters and the insured assets.
References: Swiss Re, sigma No 2/2019: https://www.swissre.com/institute/research/sigma-research/sigma-2019-02.html
CRED ve UNISDR, 2018 Review of Disaster Events
CRED, CRED Crunch 54 Disasters 2018: Year in Review
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