Natural disasters caused $160 billion in damages in 2018 with about half covered by insurers
Energize Weekly, January 16, 2019
Natural disasters worldwide caused $160 billion in damage and killed 10,400 people in 2018, making it the fourth mostly costly year for the insurance industry since 1980, according to the international insurer Swiss Re Group.
“The indications at the start of 2018 were that it would be a more moderate year,” Petra Löw, a Swiss Re analyst, wrote. “However, the second half of the year saw an accumulation of billion-dollar losses from floods, tropical cyclones in the U.S. and Japan, wildfires and earthquakes.”
About half the $160 billion in losses were insured. The average annual loss since 1980 was about $140 billion. The insured losses of $80 billion was “significantly higher” than the 30-year average of $41 billion.
The higher payout was the result of a higher level of coverage in some regions. North America accounted for 68 percent of insured losses, Asia for 23 percent and Europe for 8 percent. The remaining losses of less than 1 percent were divided between South America, Africa, Australia and Oceania.
There were 163 natural disasters across the American continent—a fifth of all global incidents— resulting in overall losses of $83 billion of which $53 billion was insured.
The costliest incident in the U.S. and worldwide was the Camp Fire in California, which did $16.5 billion in damages. That was followed by Hurricane Michael, which left $16 billion in damages in its wake in the U.S. and Cuba.
California wildfires in total led to $24 billion in losses with three-quarters of them covered by insurance, according to Swiss Re.
Over the course of the year, 29 events each resulted in an overall loss of $1 billion or more.
In all, Swiss Re’s NatCatSERVICE logged 850 events in 2018 with floods, flash floods and landslides making up 46 percent of the total, followed by storms with 42 percent of the total.
Heat, cold and wildfire events were 7 percent of the logged events with geophysical events—earthquakes, tsunamis and volcanic eruptions—accounting for 5 percent.
“Generally speaking, the distribution followed the long-term trend towards a greater number of storms and floods,” according to Löw.
Asia was the hardest hit continent with 43 percent of the events. Typhoon Jebi was the third most expensive natural disaster causing $12.5 billion in damage in Japan and Taiwan.
Overall losses from tropical cyclones in 2018 came to about $57 billion, of which $29 billion was insured.
There were 10,400 deaths around the world caused by natural disasters—one of seven years since 1980 with a death toll around 10,000.
While geophysical disasters were only 5 percent of the total, they accounted for 34 percent of the fatalities. Storms resulted in 24 percent of the deaths, similar to the rate in 1980.
There was, however, in a large increase in flood-related deaths—35 percent of the total compared with 14 percent in 1980. The reason was large-scale floods in Asia and Africa.
Earthquakes and quakes accompanied by tsunamis claimed more than 3,000 lives in Indonesia in August, September and December, making them the events with the highest number of fatalities.
Wildfires killed 273 people worldwide, a figure surpassed, since 1908, only by 1997 when there were widespread fires in Greece that claimed 357 lives. There were 110 wildfire fatalities in the U.S.
“Payouts by the insurance industry helped to boost catastrophe resilience, in other words the ability after a disaster to return to normality as quickly as possible,” Löw said. “However, industrialized countries still account for the vast majority of insurance payouts following natural catastrophes. There has been a steadily growing willingness in these countries to take out coverage against natural hazards since the 1980s.”