Which countries saw the biggest surge in claims payments in 2017?

Which countries saw the biggest surge in claims payments in 2017? | Insurance Business Canada

Which countries saw the biggest surge in claims payments in 2017?

 There are multiple factors that could trigger a surge in insurance claims. The first might simply be growth in a marketplace. If the number of active policies in a country or a specific insurance sector increases, then the number of claims will likely rise in correlation. A second major factor is natural disasters. In 2017, a string of major catastrophes in several countries caused a huge surge in gross claims payments and the largest ever recorded level of insured losses from natural and man-made disasters.

According to OECD Global Insurance Market Trends, the country to observe the largest increase in non-life gross claims payments in 2017 was Peru. The South American country saw an 85.7% increase after suffering its worst flooding in decades, which caused rivers to overflow and mudslides to destroy infrastructure and homes. The floods caused estimated losses of US$3.1 billion, US$380 million of which was insured.

Interestingly, the country to observe the largest decline (-27.2%) in non-life gross claims payments in 2017 was Bolivia, located near to Peru in western-central South America. Being neighbors does not necessarily correlate to similar gross claims payments.

The OECD Global Insurance Market Trends report shows trends in non-life insurance gross claims payments varied widely across countries and had a high level of variability. Gross claims payments went up in 33 reporting countries in 2017, while declining in 12.

The 2017 annual real growth rates of gross claims payments in the non-life sector in selected countries can be seen below. The growth rates take into account the variations in outstanding claims provisions (whenever possible). All statistics were sourced by OECD Global Insurance Statistics.

1.            Peru                     85.7%

2.            Honduras            36.2%

3.            New Zealand       34.8%

4.            Lithuania              29.8%

5.            Nicaragua            24.3%

6.            Portugal               13.0%

7.            Poland                  12.7%

8.            Hungary               11.7%

9.            Israel                     10.8%

10.          Slovenia               10.5%

11.          Luxembourg         8.1%

12.          Latvia                    7.9%

13.          Sweden                7.6%

14.          Spain                     7.0%

15.          Germany              6.8%

16.          Turkey                  6.7%

17.          Mexico                 6.4%

18.          Australia              5.9%

19.          Austria                  4.6%

20.          Estonia                 4.0%

21.          Indonesia            3.7%

22.          Hong Kong          3.2%

23.          Iceland                 3.2%

24.          Greece                 3.0%

25.          United States       2.8%

26.          France                  2.8%

27.          Switzerland          2.6%

28.          Guatemala           1.9%

29.          Italy                       1.7%

30.         United Kingdom    1.4%

31.          Denmark              0.6%

32.          Netherlands         0.5%

33.          Czech Republic    0.4%

34.          Chile                    -0.7%

35.          Norway                -2.4%

36.          Russia                  -2.7%

37.          Malaysia              -3.0%

38.          Finland                 -3.7%

39.          Belgium                -6.8%

40.          Costa Rica            -6.8%

41.          Brazil                     -8.3%

42.          Japan                    -8.4%

43.          Colombia              -9.4%

44.          Singapore             -13.6%

45.          Bolivia                  -27.2%

According to global reinsurance firm Swiss Re, 2017 saw the largest ever recorded level of insured losses from natural and man-made catastrophes. Some of the largest disasters around the world included: Cyclone Debbie in Australia (estimated losses of US$2.7 billion, of which about US$1.4 billion was insured); wildfires in the US (estimated losses of US$13 billion, of which about US$9.8 billion was insured); the Mexico earthquake (estimates losses of US$6 billion, of which about US$2 billion was insured); and multiple floods and landslides in China and South Asia with minor insured losses.

It’s also impossible to forget the devastating Atlantic hurricane season in 2017, which saw Hurricane Irma (estimated losses of US$57 billion, of which about US$32 billion was insured), Hurricane Harvey (estimated losses of US$95 billion, of which about US$30 billion was insured), and Hurricane Maria (estimated losses of US$68 billion, of which about US$30 billion was insured) leave trails of devastation in their wake. All of these events understandably triggered increases in gross claims payments.

Countries that experienced a decline in gross claims payments typically were less affected by natural disasters in 2017, the report continues. It also highlights Japan, which experienced a decline of -8.4% in 2017, which was actually a result of paying a surge of claims in 2016 following the Kumamoto earthquake.