Global natural disasters result in $54bn of insured losses

Global natural disaster events were responsible for a total economic loss of over $200bn in 2016 and $54bn of insured losses according to Aon Benfield. Their 2016 Annual Global Climate and Catastrophe Report reveals that 2016 was the seventh highest on record for economic losses, with flooding causing nearly one-third of the all economic losses. Record temperatures are believed to have caused the increase in severe weather, which when added to damage from earthquakes and flooding, makes up 70% of all economic losses in 2016. Steve Bowen, Aon impact forecasting director and meteorologist said, “After a decline in catastrophe losses during the previous four years, 2016 marked a bit of an uptick in natural peril costs to the global economy. When recognising that we have seen a nominal increase in both annual and individual weather disaster costs in recent decades, we recognise that factors such as climate change, more intense weather events, greater coastal exposures and population migration shifts are all contributors to the growing trend.” 34 natural disasters were counted in 2016, each costing over $1bn to the world’s economy. The report also highlighted that only 26% of losses were covered by insurers due to a higher percentage of damage occurring in areas with low insurance penetration. Despite this, public and private insurance industry losses were 7% above the 16-year average and the highest combined total recorded since 2012.