The North Island floods and Cyclone Gabrielle have stood out as two major extreme weather events that have broken through the US$1 billion loss threshold, according to figures from CRESTA.
According to the firm’s fourth quarter update of the CRESTA Industry Loss Index (CLIX), international (non-US) catastrophic events that resulted in insurance industry losses exceeding US$1 billion included:
Two additional events in 2023, severe convective storms in Germany in June and Eastern Australia in December, are currently under investigation and may also surpass the US$1 billion loss threshold.
The total international loss from these billion-dollar-plus events in 2023 is estimated at US$16.7 billion. This figure is slightly below the 23-year annual average of US$17.1 billion (adjusted to 2023 values).
The Kahramanmaras earthquake sequence in Turkey, occurring on Feb. 6, was the largest non-US event loss in 2023. CRESTA estimates this event generated an industry loss of US$5.8 billion, marking the largest catastrophe loss ever for the Turkish insurance market. Following closely was the severe convective storm in Northern Italy from July 19-25, with an estimated industry loss of US$2.7 billion, also a record for the Italian insurance market.
New Zealand’s two record-breaking weather events early in 2023 totalled a combined industry loss of US$2.7 billion.
Tropical cyclone losses in 2023 were predominantly due to Hurricane Otis in Mexico, another record loss event for the country. Additionally, the floods in Beijing and surrounding areas following Typhoon Doksuri in early August contributed to significant losses. Japan, in contrast, had a relatively mild typhoon season with no losses exceeding US$1 billion.
“While from a global perspective, international cat losses in 2023 were slightly below the long-term average, several countries experienced record-breaking events, namely Turkey, Italy, New Zealand, and Mexico,” said Matthias Saenger, CRESTA CLIX manager. “This situation effectively illustrates the value proposition of global reinsurance: extraordinary or even record-breaking cat losses on a national market level can represent quite ‘normal’ loss levels in a globally diversified reinsurance portfolio. This scenario was the case in 2023 and explains why this year’s cat losses were managed so robustly.”
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