It was the most expensive year for insured loss estimates from natural catastrophes in four years according to Willis Re`s 2016 Summary of Natural Catastrophe Events.
Insurance costs from the disasters totalled $39.5 billion in the face of a loss reduction trend dating back to 2011, when losses dropped from $120 billion annually to $23 billion.
The last time natural disasters cost the insurance industry this dearly was in 2012 when the losses accumulated to $60 billion.
While the Category 5 Hurricane Matthew incurred the biggest American loss at $2.3 billion, it was far from the most destructive.
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The storm that ravaged mostly Florida, Georgia, North and South Carolina was dwarfed in insured losses by the Japanese Kumamoto earthquake ($4.8 billion) and the Canadian, Fort McMurray wildfires $3.5 billion.
“As our report shows, despite natural catastrophe insured losses falling in the last five years to 2016, they are still significant, and lower profile perils such as the wildfire around Fort McMurray have the potential to cause substantial losses,” John E Alarcon, executive director of catastrophe analytics for Willis Re International, said.
“Importantly, our report also highlights that economic losses continue to be higher than insured losses and substantially so in some regions. Clearly the insurance industry has a significant role to play in helping economic recovery by supporting resilient societies and closing the protection gap between insured and total economic loss when natural catastrophes occur.”
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