Insurance carriers paid out $39 billion in total insured losses related to natural catastrophes last year—a figure 38% lower than the 10-year-average loss of $63 billion, a report from
Aon Benfield’s catastrophe modeling team revealed this week.
The decrease comes despite the occurrence of 258 natural disasters in 2014, just shy of the 260 10-year-average.
Stephen Mildenhall, CEO of Aon Benfield Analytics, suggested the low level of insured losses may be due to an increase in capital and better risk management—two things that happen to make insuring against catastrophes a source of growth for insurance companies.
“The secular increase in catastrophe losses since 1980, which is broadly in-line with global gross domestic product, continues to be an engine of growth for the insurance industry,” Mildenhall said. “With its abundant capital and sophisticated risk management tools, the industry is better positioned than ever to deliver on its core mission of providing critical risk transfer products that enable growth and development all around the world.”
The biggest insured losses of last year were the result of severe thunderstorms, including Storm Ela in Europe, which devastated areas of Belgium, France and Germany in June and cost insurers roughly $3.0 billion.
The winter storms in the US in May also exacted a heavy toll, with insured losses of about $2.9 billion.
Total global economic losses for the year were $132 billion—37% below the 10-year-average of $211 billion.
“Global insured property catastrophes accounted for 8.6% of global property premium in 2014, compared with a 10-year average of 13.9%,” Mildenhall commented.
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