Gallagher Re has reported that the first half of 2024 saw active global natural catastrophes resulting in nearly average financial costs for governments and the insurance industry. The economic loss from all natural perils reached a minimum of $128 billion, slightly lower than the most recent 10-year H1 average of $133 billion.
The private insurance market and public insurance entities covered at least $61 billion of this loss, which is 25% higher than the decadal average of $49 billion. The above-average insured losses were attributed to a higher frequency of small- to mid-sized severe convective storm (SCS) events with robust insurance coverage in the United States.
In its latest report, Gallagher Re notes that as claims filings and processing continue, H1 loss totals are expected to show further development throughout the year.
Excluding losses associated with earthquakes, volcanoes, and other non-atmospheric events, the economic cost of weather and climate-related disasters was at least $113 billion. This figure is close to the decadal average of $117 billion.
This marks the sixth consecutive H1 with weather and climate-related economic losses at or above $100 billion. Insurers covered at least $57 billion of these losses, which is 22% higher than the decadal average of $46 billion, according to Gallagher Re.
As the industry enters the second half of the year, there is heightened focus on the Atlantic hurricane season. Colorado State University, a new collaborative partner with the Gallagher Research Centre, has forecast the potential for a hyperactive season. Record warmth in the Atlantic Ocean and the transition from El Niño to La Niña conditions in the central and eastern Pacific Ocean are major factors driving this forecast.
Gallagher Re highlights the need for the insurance industry to be prepared for a potentially challenging second half of the year. Land and ocean temperatures set global records for 13 consecutive months from June 2023 to June 2024, contributing to more unpredictable and extreme events in 2024.
The total economic loss for H1 2024 was preliminarily estimated at $128 billion, close to the decadal average of $133 billion. This was driven by at least six individual events resulting in economic losses greater than $5 billion each.
Two of these events occurred in Asia, with one each in the United States, Middle East, Europe, and Latin America. These six events alone accounted for $47 billion, or 37%, of all economic losses during the first six months. Two other U.S. SCS outbreaks were just under $5 billion.
The total insured loss for H1 2024 was preliminarily estimated at $61 billion, above the decadal average of $49 billion. This total is expected to continue rising in the coming weeks and months and includes losses paid out by the private insurance market and public insurance entities.
There were at least 19 individual billion-dollar insured loss events, marking the second-highest H1 total on record, behind the 20 in 2023 and 2022. Twelve of these events resulted in multi-billion-dollar losses, as noted by Gallagher Re.
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