Willis Re: Above-average annual insured natural catastrophe losses in 2020 despite multiple ‘near-misses’

5 February 2021

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According to the Summary of Natural Catastrophe Events 2020 published this week by ICMIF’s Supporting Member Willis Re, insured losses from major natural catastrophes in 2020 reached roughly USD 78 billion, the fourth largest total since 2011, and about 17% higher than the ten-year average of USD 66.5 billion. However, the total does not reflect high levels of storm activity, because multiple hurricanes and tropical cyclones skirted major built-up areas last year.

The report finds that total loss figure arose despite the limited impact of North Atlantic hurricanes during the most active season on record with 30 named storms. Few of these made landfall, with Hurricane Laura causing an insured loss of USD 8 to 9 billion, the largest weather-related loss event. Instead, the total loss arose from a series of small and medium-sized events.

In Europe, windstorm Ciara (Sabine) impacted more than ten countries producing nearly USD 2 billion of insured losses, amongst several other storms –Ines, Dennis, and Jorge – within a two-week period. Such storm clusters have the potential to cause larger insured losses as a result of accumulated precipitation and wind damage, although the impact of this cluster was mostly driven by Ciara.

In Asia, Tropical Cyclone Haishen caused under USD 1 billion of insured losses, well below those caused by similar storms during 2019’s cyclone season. The largest event of 2020 to hit Latin America and the Caribbean was hurricane Iota in November, with an estimated economic loss of about USD 1.3 billion, but a much lower insured loss.

Yingzhen Chuang, Regional Director, Catastrophe Analytics, Willis Re International, said: “Natural catastrophe losses were high in 2020, but things could have been worse, given the number of storms which formed around the world. Fortunately, despite an active Atlantic Hurricane season, landfalls were limited. Whilst losses in Europe were modest, we did see a number of earthquake events as a reminder of the seismically active nature of southern Europe, as well as severe flooding from windstorms and hailstorm activity. During a year when Covid-19 dominated catastrophe loss discussions, there were nevertheless a series of smaller but impactful natural catastrophe events.”

Vaughn Jensen, Executive Vice President, Catastrophe Analytics, Willis Re North America, said: “A record number of North Atlantic hurricanes formed in 2020, but landfalls did not occur in great numbers, or touch areas with highly concentrated insured exposures. If they had, the story of 2020 would have been dramatically different. However, the sheer number of storms – and the continued incidence of billion-dollar wildfires in the US and elsewhere, plus the severity of the Iowa derecho event – gives the industry cause to consider new emerging trends.”

View the complete report here.

 

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