$9bn Insurance Loss In US Highest in H1 2022- Aon
Insurance and reinsurance brokerage giant, Aon has said that the $9 billion events experienced in the U.S. in the first half of 2022 make it the most active region in catastrophic loss.
The region is followed by seven in the EMEA, three in the APAC region, and two in the Americas.
Further, at least 20 events were recorded with at least $500 million in insured losses, which Aon says ties H1 2022 with 2011 as the second highest H1 total this century, behind only the 24 seen in H10.
Globally, Aon said insured losses from natural disaster events totalled $39 billion in the first half of 2022, which is roughly 18 per cent above the 21st Century average.
In contrast to the above-average volume of catastrophe losses experienced in the six months, global economic losses from natural disasters dipped above-average on the 21st Century average of $121 billion, the six months is contained in Aon’s First Half of 2022 Global Catastrophe Recap from which, which examines a period marked by large-stone disasters on almost every continent, which ultimately resulted in above-average losses for the re/insurance sector.
“The first half also saw brand new complexities added to the event response process (including higher replacement costs and reinsurance placements) that were influenced by challenging outside societal and financial factors – notably the war in Ukraine and the highest inflation seen in decades,” says Aon.
In terms of insured losses, persistent severe convective storm (SCS) activity, notably in the U.S. and Europe, was a key driver in H1 2022, according to Aon.
Looking at economic losses, which at $92 billion shows that the protection gap was around 57 per cent – meaning that more than half of all economic losses suffered from nat cat events were not covered by insurance in H1 2022 – Aon notes 21 individual billion-dollar economic loss events. Again, all but one of these were weather-related, with the exception being the March 16th earthquake near the coast of Japan. combined
Commenting on the H1 2022 loss figures, Aon warns: “It is anticipated that there will be robust loss development in most regions, as the cost(s) associated with seasonal monsoon flooding, drought, and severe convective storm events are fully realized.”
In its extensive report, the insurance and reinsurance broker explains that “the fingerprints of climate change continued to become more evident in individual behaviour and longer-term temperature and precipitation trends in 1H 2022.”
“Warmer than average temperatures were cited across a broad swath of the globe which aided in more unusual weather patterns that were already set in motion by the primary influence of La Niña conditions which have been ongoing for nearly three consecutive years,” adds the firm.
Looking ahead to the second half-half of the year, Aon emphasises that Q3 is often the costliest quarter of the year, and with forecasters predicting an above-average level of activity during the Atlantic hurricane season, Q4 has the potential to be costly for the industry as well.
“Elevated wildfire behaviour and the continual threat of severe convective storms will also require close monitoring. With inflationary pressure adding greater costs to supply and combining dining with more impactful disasters, it is anticipated that another challenging round of re/insurance renewals will be forthcoming,” says Aon.
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