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Global insured CAT losses hit record $144bn in 2017

Source: Middle East Insurance Review | May 2018

Insurers paid out $144bn to cover the damage from Nat CATs and man-made disasters last year, the highest-ever recorded in a single year and up from $56bn in 2016, according to the latest sigma study from the Swiss Re Institute. 
 
   Overall, natural and man-made disasters triggered $337bn in economic losses last year, almost double the losses in 2016 and the second highest on record, the report said. 
 
   The highest insured losses came from three hurricanes – Harvey, Irma and Maria (HIM) – that struck the US and the Caribbean in quick succession. These hurricanes resulted in combined insured losses of $92bn, making 2017 the second costliest North Atlantic hurricane season since 2005. 
 
   “After 12 years of no major hurricane making US landfall, 2017 is likely to go down as one of the most expensive North Atlantic hurricane seasons in history, in terms of both economic and insured losses,” said Mr Martin Bertogg, head of catastrophe perils at Swiss Re. 
 
   The North Atlantic seems to still be in an active phase of hurricane activity, suggesting a higher probability of hurricane formation and major hurricanes making landfall. “A key takeaway from HIM is that insurers need to consider multiple hurricanes occurring in a given year, as much as the severity of individual events, in their modelling of hurricane risk. This is important from a risk management perspective as it will help insurers – and, ultimately society – be better prepared for similar magnitude events in the future,” he said.
 
   It was also a record year for wildfires, with the $14bn combined insurance losses being the highest ever. Flooding also caused significant financial damage, with a $6bn Yangtze flood in China ranking as the worst Asian Nat CAT of 2017. 
 
   In terms of sigma criteria, there were 301 CATs worldwide in 2017, down from 329 in 2016. More than 11,000 people lost their lives or went missing in disaster events last year, and millions were left homeless. Nat CATs claimed more than 8,000 victims. A landslide and floods in Sierra Leone in mid-August took most lives, with 1,141 people declared dead or missing. Elsewhere, heavy monsoon rains and separate flood events led to more than 1,000 deaths across India, Nepal and Bangladesh. M 
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