Fewer nat cat losses in 2018, but caution advised

Individual events did cause high losses for some, but overall 2018 has not been as deadly or expensive as previous years, according to Munich Re’s data. But insurers shouldn’t get too confident, as it is the second half of the year that usually brings higher losses. For example, in 2017 hurricanes, Harvey, Irma and Maria, pushed overall losses for the year to $340bn. “Following a period of disasters with record losses, it is nice to be able to record a phase with low losses,” said Munich Re Board member, Torsten Jeworrek, of the results. “Looking at a short timespan may distort the true picture. The most important thing is to understand the long-term developments.” The overall losses of $33bn were roughly half those of the previous year and of the price, $65bn. Insured losses, at approximately $17bn, were less than in the previous year - $25.5bn, but more or less matched the average for the first six months over the last 30 years, $17.5bn. Some 3,000 people lost their lives in natural disasters in the first half of 2018, a lower figure than the 5,540 for the corresponding period last year. Winter came Winter weather in Europe and North America features prominently in the statistics for the first half of the year. The most destructive event was Storm Friederike, which swept across northern Europe in January. Thousands of buildings and vehicles were damaged. In Germany, train travel was disrupted after uprooted trees had torn down the overhead lines in many places. Overall losses came to €2.2bn of which €1.7bn were insured. Roughly two thirds of the losses occurred in Germany. Just a few weeks previously in the same regions, Storm Eleanor had caused damage close to €1bn. Cold weather and storms continued into spring as well. In February and March, North America was hit by several widespread snowstorms. The most destructive event was a blizzard in the first week of March, which caused overall losses of US$ 2.2bn, of which $1.6bn was insured. In total, winter losses in Europe came to €3.9bn, of which €2.9bn was insured. The winter in North America caused overall losses in the first half of the year totalling $3.8bn and insured losses of $2.7bn. Europe storms and drought Torrential rain and other weather losses in Europe from storms came to around €1.6bn, with insured losses of at least €900m. On the whole, losses caused by severe thunderstorms are rising in Germany. While windstorm and hail losses have a high level of insurance coverage, the share of insured losses from flash floods is usually below 50%. Some areas in the north east of Europe -the Baltics and Poland- have experienced dry weather and many places fear downturns or losses, but the loss amounts can only be determined after the crops have been harvested. Ernst Rauch, chief climate and geo scientist at Munich Re, explained the background: “Although individual events like these cannot be attributed to climate change, climate model studies show that one future effect of the increase in temperature will be more frequent periods of heat and drought, along with more intensive convective rainfall.”

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