Gallagher Re, one of the world’s leading reinsurance brokerage firms, has reported that insured losses from major catastrophes in 2021 have so far reached $116 billion, the third largest in 10 years.
The reinsurance broker also reported that the figure was about 63% higher than the average annual loss since 2011.
For instance, it recalled that the peak insured natural-catastrophe loss in 2017 was $143 billion and $120 billion in 2011, noting, however, that multiple events are responsible for the large losses.
According to the Summary of Natural Catastrophe Events 2021, published today by the company, it estimated that 35% of the loss was caused by tropical cyclones, followed by severe thunderstorms at 25%. The largest single loss event was Hurricane Ida in August, which cost insurers roughly $37bn.
In her comments on the report research findings, Gallagher Re regional director of international catastrophe analytics, Yingzhen Chuang, said: “With the large loss experience in 2021, catastrophe models are firmly in the market’s headlights. They remain pivotal to enabling conversations around pricing adequacy, secondary perils, climate change, and systemic connectivity of risk, but it has become essential to ensure we understand what models can and cannot contribute to the conversation.
“By necessity, summarising a complex global picture requires some simplifications. However, it is clear that carefully contextualising global loss experience is essential to an industry founded on managing volatility and uncertainty”, she added.
The company noted that largest insured losses from a single event in 2021 came from Hurricane Ida in August, with $37bn in all property-insured losses, adding that in Europe, Storm Bernd in mid-July that caused flooding in Germany and Belgium totalling more than $13bn in losses.
In other climes globally, the insurance broker reported that “the events drawing the most attention in Asia were the thunderstorms that affected the Province of Henan in China, while in Latin America and the Caribbean, the highlight of the year was the absence of significant individual events causing large insured losses.”
The company expressed serious concern that the insured losses for 2021 were the third highest on record since 2011, second after 2017.
But then, Gallagher Re’s statistics indicated that the average insured losses had been trending upwards, from an average between 2012 and 2016 of $38.1 billion, but averaging $81.875 billion for the years 2018, 2019, 2020, and 2021.
