Global CAT losses lowest in five years

While large swathes of North America suffer record snow falls and low temperatures, a recent report shows global CAT losses to be at record lows.

Risk Management News

By

While large swathes of North America suffer record snow falls and low temperatures, a recent report shows global CAT losses to be at record lows.

In 2014, significant insured losses totaled approximately $33 billion, a dramatic drop compared to the historic insured losses seen in 2011, which totaled approximately $126 billion.

Guy Carpenter & Company, a global risk and reinsurance specialist and a wholly owned subsidiary of Marsh & McLennan Companies, released its annual Global Catastrophe Review, which reports that insured losses in 2014 were at the lowest level seen since 2009.

“Although insured losses for 2014 were among the lowest recorded in years, we still observed powerful impacts and significant losses from both natural and man-made catastrophes,” said James Waller, Ph.D, research meteorologist at GC Analytics. “Notable insured losses from around the globe included the 2014 February snowstorms in Japan, hail and windstorms in Europe, severe flooding in the United Kingdom and a cold, stormy winter in the eastern half of North America.”

The Americas comprised 57 percent of global losses in 2014, as compared to 48 percent in 2013. Arctic winter weather, hurricanes, earthquakes and convective outbreaks contributed to these insured losses.

In the U.S. and Canada, the frigid winter caused $2.3 billion in insured losses alone.

Although the winter was not unprecedented, it is considered one of the coldest winters in the past 30 years across many states throughout the U.S. Additionally, considerable convective outbreaks spawned EF-3 and EF-4 tornadoes across the Southern United States, with later outbreaks causing severe hail storms across the Midwest.

In spite of these instances of severe weather, hail reports in 2014 were below the 2005 to 2013 average. Earthquakes also played an important role in insured losses for the year, with magnitude 7.3 and 6.0 tremors present along the Nicaragua-Ela Salvador border and in the Napa Valley of California, respectively.

The North Atlantic Basin experienced six hurricanes in 2014, one of which hit the mainland of North America. In the East Pacific, 2014 was the most active hurricane year since 1992, with 16 hurricanes total and nine major hurricanes affecting the region. The most impactful hurricane of the season, Odile, struck the Baja Peninsula of Mexico and caused an estimated $1.6 billion in insured losses. (continued.)
#pb#

Notably, tropical storm Iselle made landfall on the Big Island of Hawaii, the first time this has happened in more than 50 years. Meanwhile, Hurricanes Fay and Gonzalo gave no respite to Bermuda, downing trees and power lines across the island in quick succession.

“Though the eye of Hurricane Gonzalo passed directly over Bermuda, exceptional damage was offset in part due to the area’s resilient building codes,” said Waller. “Although 2014 was a relatively quiet year for catastrophes, events such as Odile and Gonzalo reaffirm the importance of continued education and the implementation of innovative risk management strategies to mitigate the losses experienced from a catastrophe.”
 
 

Keep up with the latest news and events

Join our mailing list, it’s free!