A global reinsurance brokerage has revealed that 2017 was a disaster year for global insurers when it came to weather-related losses, with Cyclone Debbie, which hit Queensland in March, making it to the list of costliest disasters.
Aon Benfield's latest report found that weather-related disasters cost global insurers US$132bn last year, and accounted for 97% of the US$353bn in economic losses caused by last year's 330 natural catastrophes.
According to Aon, hurricanes Harvey, Irma, and Maria caused majority of the insurance losses, accounting for 60% of insurance payouts in 2017; while Cyclone Debbie was tagged as the most expensive event for insurers in the Asia-Pacific,
ABC reported.
Aon Benfield's Peter Cheesman said that “while 2017 was an expensive year for the insurance industry, the traditional reinsurance market was well capitalised to withstand the high volume of payouts.”
QBE said earlier this week that Hurricane Maria, the Californian wildfires, and the storms in Australia hit its underwriting business' profitability in the final quarter of 2017 – insurance losses which its chief executive, Pat Regan, said were “unprecedented.”
Bell Potter analyst TS Lim said being prepared for weather-related losses was more of an art than a science for insurers.
"There's never enough reinsurance, but you have to trade this off with profits to shareholders," Lim told ABC. "I think of all the insurers,
IAG is the best prepared, given they cede 32.5% of all risk to the reinsurers."
Meanwhile, Cheesman said the losses from Cyclone Debbie – which, according to Aon, was the only natural disaster in APAC to cause more US$1bn in insured losses, mostly due to damages caused by widespread flooding – “demonstrate that the key drivers of property damage in cyclones can vary significantly depending on the event."
The Aon report also found that 56% of natural disaster losses in Australia were insured, compared to just 13% across APAC,
ABC reported.
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