Impact Forecasting, the catastrophe model development team at Aon Benfield, have revealed that the global cost of natural disasters in terms of insured losses is down 31% when compared with a historical average.
The Annual Global Climate and Catastrophe Report
, released by Impact Forecasting last week showed that insured losses for 2015 stood at US$35 billion, down 31% from the 15 year average of US$51 billion.
The report also noted that last year saw 300 separate global natural disasters, higher than the 15 year average of 269, whilst global economic losses for the year stood at US$123 billion, some 30% below the 15 year average of US$175 billion.
The US$35 billion insured loss represents the lowest annual total since 2009 as Stephen Mildenhall, chairman of Aon Analytics, said that, while it may have been a calmer year, the industry must not rest on its laurels.
“Global insured property catastrophes in 2015 accounted for just 28 percent of economic losses, in-line with the 10-year average of 29 percent,” Mildenhall said.
“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.
“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.
“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.”
Steve Bowen, associate director and meteorologist at Impact Forecasting, said that the increasing numbers of natural disasters over the year highlight the need for continued vigilance and development.
“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.
“For just the fourth time since 1980, there were more than 30 such events in a year,” Bowen continued.
“Asia once again incurred the greatest overall economic losses, representing 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 noted that the El Niño cycle that had affected Australia throughout the later months of the year had an impact on the year in disasters, as next year could bring around its own challenges.
“The strongest El Niño in decades had definitive impacts on global weather patterns during the second half of 2015 that led to costly flood, tropical cyclone and drought events,” Bowen noted.
“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.”
To access the full Impact Forecasting report, click here