Global broking group Aon estimates insurance industry losses from natural catastrophe events in the first nine months of 2024 of at least $102 billion, with the impacts of hurricane Milton and additional events expected in the rest of the year poised to push annual insured losses above the $125 billion seen in 2023.
From January 1st to September 30th, 2024, Aon’s Q3 Global Catastrophe Recap – October 2024 report, highlights at least 280 notable natural disaster events around the world, driving economic losses of at least $258 billion, which is roughly 27% below the 2023 9M period of $351 billion, and also below the average of $277 billion.
However, insured losses of $102 billion for 9M 2024 is up on last year’s $88 billion and the average of $79 billion, and this is despite a protection gap of 60%, which according to Aon is one of the lowest on record, driven by the higher contribution of losses in the US, where insurance penetration is higher than in other countries.
During the Q1-Q3 period, Aon states that insured losses from primarily perils were relatively low, with no one event showing the potential to significantly impact the broader reinsurance marketplace.
In fact, $59 billion, or 58% of insured losses during the period came from severe convective storms (SCS), while $21 billion, or 21% came from tropical cyclones.
Aon notes that most of the losses, including those from SCS events, continued to be retained by insurers following structural changes implemented and maintained by reinsurers.
On Q3 specifically, Aon says that losses were driven by three expensive hurricanes, SCS events in both the US and Canada, and flooding in Central Europe.
The insurance and reinsurance broker’s report also reveals that Canada is enduring its costliest insurance loss year on record, with the majority of the impact occurring as a result of four events within one month in the third quarter, with expected payouts exceeding $5.9 billion.
Elsewhere in the world, Typhoon Yagi, the deadliest event of the year and costliest event on record in Vietnam, became the overall third costliest event in the period under review, reveals Aon.
To the end of the third quarter of 2024, natural disasters resulted in an estimated 13,000 fatalities, which is actually the lowest since 1986, according to Aon.
“Our latest study highlights the complexity of natural catastrophe risk management for organisations, necessitating a myriad of resources around physical measures, warning systems, forecasts, and public awareness. The insurance industry has again played a significant role in this process, with re/insurance covering a high proportion of the global losses so far this year relative to previous periods,” said Michal Lorinc, head of catastrophe insight at Aon.
Aon’s 9M insured loss total is slightly below Gallagher Re’s $108 billion figure reported earlier this month, but the fact industry losses from both brokers is above the $100 billion mark before the addition of hurricane Milton losses, suggests that 2024 is going to be another costly year for insurers.
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