Insured losses from major Nat CAT in 2020 reached an estimated $78bn, the fourth largest total since 2011, and about 17% higher than the 10-year average of $66.5bn.
According to Willis Re’s latest report, the total losses do not accurately reflect the high levels of storm activity because multiple hurricanes and tropical cyclones skirted major built-up areas last year. The figure arose despite the limited impact of North Atlantic hurricanes during the most active season on record with 30 named storms. Few of these made landfall, with hurricane Laura causing an insured loss of $8-9bn, the largest weather-related loss event. Instead, the total loss arose from a series of small and medium-sized events.
In Europe, windstorm Ciara (Sabine) impacted more than 10 countries producing nearly $2bn of insured losses, among several other storms – Ines, Dennis, and Jorge – within a two-week period. Such storm clusters have the potential to cause larger insured losses because of accumulated precipitation and wind damage, although the impact of this cluster was mostly driven by Ciara.
In Asia, tropical cyclone Haishen caused under $1bn of insured losses, well below those caused by similar storms during 2019’s cyclone season. The largest event of 2020 to hit Latin America and the Caribbean was hurricane Iota in November, with an estimated economic loss of about $1.3bn, but a much lower insured loss.
Willis Re international regional director, catastrophe analytics Yingzhen Chuang said, “Natural catastrophe losses were high in 2020, but things could have been worse, given the number of storms which formed around the world. Fortunately, despite an active Atlantic hurricane season, landfalls were limited. Whilst losses in Europe were modest, we did see a number of earthquake events as a reminder of the seismically active nature of southern Europe, as well as severe flooding from windstorms and hailstorm activity. During a year when COVID-19 dominated catastrophe loss discussions, there were nevertheless a series of smaller but impactful natural catastrophe events.”
Japan’s zero-landfall tropical cyclone season
The report also focused on Japan’s tropical cyclone season of 2020, where none made landfall. This was in stark contrast to the activity in the past two years; however, historical analysis shows that zero landfalls do occur (1988 and 2008).
Tropical cyclone activity can be measured in multiple ways; these can include activity in the Western North Pacific basin as a whole or landfalls. The number of tropical cyclones in the basin so far (23) is close to the seasonal average (approximately 25) while the zero-landfall count for Japan during 2020 highlights that landfalls are not wholly correlated to basin activity.
One of the learnings from previous seasons with events such as typhoon Jebi is that loss experience is not exclusively driven by the landfalling tropical cyclone intensity but is heavily dependent on where the tropical cyclone makes landfall; but first, landfall must take place, said the report. M