Global disasters pushed economic losses to $306 billion

“Costliest year in history” to hit QBE profits

2017 was the third most expensive year for the insurance industry with global disasters, such as the three major hurricanes in the United States and wildfires in California pushing out the losses to $306 billion, according to a report from Sigma.

Sigma, the research arm of reinsurance giant Swiss Re, said the cost of natural and man-made disasters was 63 percent higher than the $188 billion in 2016. Natural disasters represented about $300 billion of the total, and man-made disasters added another $6 billion.

Most of the impact was in the US, reflecting the devastation from Hurricanes Harvey, Irma and Maria. 2017 was the second-costliest hurricane season, dwarfed only by Hurricane Katrina in 2005. 

The report ranks 2017 as the third-most expensive year for insured losses which came out to $136 billion, more than double than $65 billion tallied last year, exceeding the industry’s 10-year annual average of $58 billion.

The most expensive year was 2011, when the Japanese earthquake and tsunami disaster struck.

“There has been a lull in hurricane activity in the U.S. for several years”, said Kurt Karl, Swiss Re’s group chief economist. “Irrespective, there has been a significant rise in the number of residents and new homes in coastal communities since Katrina, Rita and Wilma in 2005, so when a hurricane strikes, the loss potential in some places is now much higher than it was previously.” 

Added to the hurricanes and wildfires were the two major earthquakes in Mexico in September that killed more than 100 people, monsoon flooding in South Asia which caused at least 1200 deaths and mudslides in Sierra Leone that killed more than 1,000 people. 

The Swiss Re report says more than 11,000 people died or left were missing in catastrophe events this year. That includes about 8250 people from natural catastrophes and 3078 fatalities in man-made disasters.