Jul 23, 2019 — Global natural disaster losses during the first half (1H) of 2019 were below average when compared against a 10-year (2009-2018) and 21st
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Global Catastrophe Recap: First Half of 2019 3 Executive Summary preliminary total of economic loss, 22% below average preliminary total of insured loss, 26% below average number of individual events, 17 below average * Compared to 21 st Century averages. All totals are in USD and are preliminary and subject to change. 73 bn 20bn 16337.86 inwettest 12-month period on record in the mainland US (ending June 2019) M8.0strongest earthquake of 2019 (Peru) 140 mphCyclone Kenneth strongest landfall on record in Mozambique 43.4°Chighest on record in Vietnam 30.0°C average temperature in January; warmest month on record in Australia 39.1°C highest on record in Cuba 46.0°C highest on record in France 32.2°C first time above 30°C in Tierra del Fuego, Chile 160 mph Wutip, strongest February typhoon on record portion of insured losses caused by severe weather and flooding perils preliminary estimate of global protection gap (4 percent above mean) percentage of global insured losses incurred in the United States 17 billion-dollar events; 6 each in the US & Asia; 4 insured billion-dollar events June20193.8Kdeaths1.85millionEl Niñophaseofficial arrival of El Niño announced by NOAA in February hottest month of June recorded globally (NASA, Copernicus, JMA) estimated number of deaths caused by natural disasters during 1H of 2019 number of people affected by Cyclone Idai in Mozambique 4 17
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Global Catastrophe Recap: First Half of 2019 4 Overview Global natural disaster losses during the first half (1 H) of 2019 were below average when compared against a 10-year (2009-2018) and 21 st Century (2000-2018) baseline, but higher versus a longer-term view (1980-2018). As seen in Exhibit 1, economic losses were estimated at US D73 billion; or 40 percent lower compared to the previous decade (USD121 billion), 22 percent lower since 2000 (USD94 billion), but similar to the average since 1980 (USD74 billion) 1. Insured losses were prelim inarily estimated at USD20 billion; down 45 percent from the 10-year average (USD36 billion), down 26 percent from the 21 st Century average (USD 27 billion), but 6 percent higher since 1980 (USD19 billion). These numbers are preliminary and subject to change as losses continue to develop. To offset any outlier years, median analysis shows that 201 9 first half natural disaster losses were higher than the 1980-2018 (USD51 billion) and 2000-2018 (USD72 billion) values , but lower than then 10-year median (USD83 billion) on an economic basis. Insured losses were much higher versus the longer-term view (USD15 billion), but lower on the mid- (USD25 billion) an d short-term view (USD28 billion). EXHIBIT 1: 1H Global Natural Disaster Losses 2 EXHIBIT 2: 1H Natural Disaster Events 3 There was a minimum of 163 natural disaster events that occurred in 1H 2019, which was below the 21 st Century average of 180 and the median of 182. As a reminder, an event must meet pre-established criteria 3 to be entered into the Impact Forecastin g database. The first six months of the year were marked by many small and medium-scale disasters whic h were impactful to many communities around the world, but not historically significant from a financial lo ss view. This was the case in Europe, Middle East & Africa (EMEA) with 50 recorded notable disasters, and Asia-Pacific (APAC) with 45. There were 37 such events in the United States and 20 in the Americas (Non-U.S.). Of note , APAC recorded the second lowest number of 1H disasters since 2000 – largely driven by fewer events in Asia, and the United States having its second-highest during the timeframe. 1 For this document: Short-term refers to 2009-2018; medium-term refers to 2000-2018; long-term refers to 1980-2019 2 Loss totals in billions USD and adjusted to today’s dollars usin g the U.S. Consumer Price Index. Average & Median uses 2000-20 18 as a baseline. 3 An event must meet at least one of the following criteria to be classified as a natural disaster: economic loss of USD50M, ins ured loss of USD25M, 10 fatalities, 50 injured, or 2,000 homes/structures damaged and/or filed insurance claims Data & Graphic: Impact Forecasting (Cat Insight)
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Global Catastrophe Recap: First Half of 2019 5 EXHIBIT 3: 1H 2019 Economic & Insured Losses by Peril The Flooding and Severe Weather (thunderstorm) perils we re the primary driver of economic and insured losses during the first half of 2019. Addition ally, Severe Weather and European Windstorm were the only perils that showed higher-than-average insured losses, compared to the 21 st Century baseline. Weather Events4 Weather-only economic losses were estimated at USD72 billion, above the medium and long-term averages but slightly below the short-term mean. Insured losses were pr eliminarily estimated at USD20 billion and were lower than the short- and medium-term averages, but higher than the long-term average (USD16 billion). EXHIBIT 4: 1H Global Weather Disaster Losses 5 Fatalities Natural disasters claimed roughly 3,800 lives during the first half of 2019; th is number was significantly below the long-term average of 37,400 and the median of 8,500. Tropic al cyclones and flooding were the deadliest perils of the first two quarters of 2019, being responsible for at least 1,500 and 1,425 deaths respectively. Most of the fatalities due to tropical cyclones in the first half of 2019 occurred in Africa. At nearly 1,400 casualties, this was the highest 1H toll on record for th e peril on the continent since 1980. 4 Weather events are catastrophes spawned by atmospheric or oceanic-influe nced scenarios. It does not include earthquakes, tsuna mis or volcanoes. 5 Loss totals in billions USD and adjusted to today’s dollars usin g the U.S. Consumer Price Index. Average & Median uses 2000-20 18 as a baseline. Data & Graphic: Impact Forecasting (Cat Insight)
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Global Catastrophe Recap: First Half of 2019 6 Economic Loss Analysis Losses by Region Economic losses resulting from natural catastrophes were below the 1H average for every region of the globe, except the United States which was 14 percent above the 21 st Century average. However, the losses for all regions were higher than the respective medians since 2000. At USD17 billion, EMEA was 26 percent higher than the median, the highest percentage above its median of any region in 1H 2019. EXHIBIT 5: Natural Disaster Econom ic Losses by Region (USD bn) EXHIBIT 6: Weather Disaster Economic Losses by Region (USD bn) Data & Graphic: Impact Forecasting (Cat Insight) Data & Graphic: Impact Forecasting (Cat Insight)
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Global Catastrophe Recap: First Half of 2019 8 Insured Loss Analysis Losses by Region Insured losses – defined as claims payout s by the private insurance market and public insurance entities – during 1H were generally lower than the average and median dating to 2000. On a region al level, only APAC (USD2.4 billion) was higher than the regional median (U SD2.1 billion) during that timeframe. This was primarily driven by flooding in Queensland, Australia between January 26 – February 7, Cyclone Fani in India between May 2-5, and seasonal flooding of the Yangtze and Yellow River basins in China. While the United States saw the highest insured loss (USD13 billion) of any region, it was lower than the 21-century average and median loss for the region. Please note that there is likely to be notable upward revisions for 1H insured payouts in both the United States and Europe. Large-scale events – such as ongoing flooding in the U.S. and severe hail and drought damage to crops in Europe during the month of June into July – will result in an extended period of farmers taking stock of damage to crop harvests and potential yields. Unti l this occurs, and all claims are filed, it will take time to fully gauge the financial cost. EXHIBIT 8: Natural Disaster Insured Losses by Region (USD bn) EXHIBIT 9: Weather Disaster Insured Losses by Region (USD bn) Data & Graphic: Impact Forecasting (Cat Insight) Data & Graphic: Impact Forecasting (Cat Insight)
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Global Catastrophe Recap: First Half of 2019 9 Billion-Dollar Events There were at least four individual bi llion-dollar events for the insurance in dustry in 1H 2019 – all of which were weather-related. Three billion-dollar events related to severe convective storms were cited in the U.S., while Europe recorded a billion-dollar loss due to Windstorm Eberhard in January. The table below lists each of these events. These loss totals are preliminar y and subject to change. 1Totals subject to change The most notable insured loss events of 1H 2019 are displa yed in Exhibit 10. Events which caused at least USD1.0 billion in damage are shown with larger-sized polygons, wh ile other significant events that did not hit the billion-dollar threshold are indicated with a smaller and specific-c olored polygon to denote ev ent type. Note that the map includes a centrally located geocoded spot for where th e most significant impacts were incurred during events which may have crossed multiple states, territories, or countries. EXHIBIT 10: 1H 2019 Notable Insured Loss Events Map Date Event Location Deaths Insured Loss (USD) 1 May 27-30 Severe Weather United States 0 2.0+ billion March 23-25 Severe Weather United States 0 1.2+ billion March 10-11 Windstorm Eberhard Western & Central Europe 2 1.1+ billion February 22-26 Severe Weather United States 4 1.0+ billion Data & Graphic: Impact Forecasting (Cat Insight)
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Global Catastrophe Recap: First Half of 2019 10 Additional Comments As always it is critical to reiterate that losses during the first six months of the year do not have any correlation to eventual final year totals. Just one major event – regardless of natural peril – can entirel y change the trajectory of a year from a financial loss perspective. The third quarter is historically the most expensive for natural disasters given the peak of tropical cyclone season in the Atlantic and Pacific Oceans. For a more detailed analysis of 2019 natural disaster even ts, please see Aon’s monthly Global Catastrophe Recap series, which can be found here. For additional historical natural disaste r loss data and other climatological information, please visit Aon’s Catastrophe Insight website: h ttp://catastropheinsight.aon.com
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Global Catastrophe Recap: First Half of 2019 11 Contact Information Adam Podlaha Head of Impact Forecasting Impact Forecasting Aon adam.podlaha@aon.com Steve Bowen Director & Meteorologist Head of Catastrophe Insight Impact Forecasting Aon steven.bowen@aon.com Michal Lörinc Senior Catastrophe Analyst Impact Forecasting Aon michal.lorinc@aon.com Anwesha Bhattacharya Senior Analyst (Hydro-meteorologist) Impact Forecasting Aon anwesha.bhattacharya@aon.com
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