Global economic losses from natural catastrophes and man-made disasters reached US$36 billion in the first half of 2018, according to new data from the Swiss Re Institute.
Global insured losses from disasters were US$20 billion in the first half of the year, according to the institute’s sigma estimates. That’s down from US$30 billion in the first half of 2018. Disaster events claimed about 3,900 victims in the first half of 2018 – the lowest half-year total in more than three decades.
The total economic loss of US$36 billion is also well below the 10-year average of US$125 billion, according to the institute.
Natural catastrophes accounted for about US$34 billion in losses in the first half, compared to US$58 billion in 2017. The remaining US$2 billion was caused by man-made disasters, according to Swiss Re Institute. Global insured losses from natural disasters fell from US$25 billion in the first half of 2017 to US$18 billion in the first half of this year. Insured losses from man-made disasters fell to US$2 billion, down from US$5 billion in the first half of 2017. Nearly 56% of all global economic losses were insured, as most disaster events occurred in areas with high insurance penetration, the Swiss Re Institute reported.
The costliest single disaster event in the first half from a loss perspective was winter storm Friederike in Europe. The largest losses from the storm were in Germany and the Netherlands, although France, Belgium and the UK were also affected. The Swiss Re Institute estimated the total economic losses from the storm at US$2.7 billion, with US$2.1 billion of those losses insured.
A series of winter storms in the US caused total economic losses of US$4 billion, including US$2.9 billion in insured losses. A March Nor’easter storm caused the largest loss for the insurance industry in the US during the first half, with claims totaling US$1.6 billion.
Higher losses may still lie ahead in the second half, however. Several parts of the world have seen heatwaves and severe dry weather conditions, which have sparked wildfire outbreaks in California and Greece and caused widespread drought across Europe and southern Australia.
“We expect to see more extreme weather conditions, such as intense heatwaves and dry spells of the like we’ve seen over the last few weeks,” said Martin Bertogg, head of catastrophe perils at Swiss Re. “This may well become the new normal. According to scientific climate models, temperature and atmospheric humidity will increase in many parts of the world, and at the same time also become more volatile. We will experience more variable rain patterns and severe droughts – and in consequence raging wildfires. Accelerating urbanization and the ongoing expansion of dwellings in natural forest areas will considerably exacerbate this loss potential. Society will need to adapt and prepare for these increasing occurrences.”