Page 19 - Insurance Times Janaury 2021

International News

Swiss Re Institute estimates "As with COVID-19, climate change close to 6 million acres, destroying
will be a huge test of global resilience. thousands of structures and triggering
USD 83 billion global Neither pandemics nor climate change billions in insured claims. Although less
insured catastrophe losses are 'black swan' events. But while than the record losses of 2018 and
in 2020, the fifth-costliest COVID-19 has an expiry date, climate 2017, 2020 will be one of the costliest
change does not, and failure to 'green' for fires.
on record the global economic recovery now will Further secondary perils included

Insurance industry losses from natural increase costs for society in future," severe floods in several provinces along
catastrophes and man-made disasters said Jerome Jean Haegeli, Swiss Re the Yangtze River in China from May,
globally amounted to USD 83 billion in Group Chief Economist. "This year's causing industry insured losses of
2020, according to Swiss Re Institute's natural disasters impacted regions with roughly USD 2 billion.
preliminary sigma estimates. This more insurance cover in place,
makes it the fifth-costliest year for the providing vital support to the people The North Atlantic hurricane season
industry since 1970. Losses were driven and communities affected and brought a record 30 named storms in
by a record number of severe enhancing their financial resilience." 2020, including five named storms
making landfall in the US state of
convective storms (thunderstorms with In the US, a record number of severe
tornadoes, floods and hail) and wildfires convective storms caused devastation Louisiana alone, again the highest on
in the US. throughout the year, likely leading to record. This year a uniquely conducive
set of atmospheric and oceanic
These and other secondary peril events record annual losses in the country for conditions was predicted to generate
around the world accounted for 70% of this peril. Australia and Canada a well-above-average number of
the USD 76 billion insured losses from suffered significant losses from hail storms and landfalls. However, most US
natural catastrophes. A very active damage in 2020. In January, hailstorms landfalls did not hit densely populated
North Atlantic hurricane season in southeastern Australia caused areas in 2020, resulting in relatively
triggered an additional USD 20 billion of insured losses of over USD 1 billion, low insured losses of USD 20 billion, far
insurance claims, moderate compared while Canada experienced its costliest- lower than in the previous record
to the record seasons of 2005 and 2017. ever hail event in Calgary in June, hurricane seasons of 2017 (Harvey,
The insurance industry covered 45% of which led to losses of USD 1 billion. Irma and Maria: USD 97 billion) and
global economic losses in 2020, above Fires also contributed to secondary 2005 (Katrina: USD 87 billion).
the ten-year-average of 37%. peril losses for insurers. Wildfires in the "Large-scale climate conditions in the
Climate change is expected to US from mid-August chiefly caused the North Atlantic suggest elevated
exacerbate secondary peril events as high insured losses, though Australia's hurricane activity for 2021 and likely
more humid air and rising 2019 fire season, the longest and most beyond. This increases the probability
temperatures create more extreme destructive ever recorded, was still of a catastrophic landfall.
weather conditions. These favour the burning in early 2020. In the US states Combined with the loss impact of
onset and spread of events such as of California, Oregon and Washington
wildfires, storm surges and floods. State, more than 800 wildfires burned secondary perils accelerated by

The Insurance Times, January 2021 19