Impact Forecasting, the catastrophe model development center of excellence at Aon Benfield, today issues its mid-year Global Catastrophe Recap report, which aggregates the key global natural disaster perils data for the first half of 2014. Aon Benfield is the global reinsurance intermediary and capital advisor of Aon plc (NYSE: AON).
The data show that economic losses from global natural disasters during the six-month period ending June 30, 2014 totaled USD54bn (2013: USD95bn) – around 49% lower than the 10-year (2004-2013) average of USD106bn.
Insured losses for the period reached USD22bn (2013: USD27bn) – approximately 19% below the 10-year average of USD27bn – with around 55% of insured losses occurring in the United States, 23% in Europe, and 19% in Asia.
Steve Bowen, associate director and meteorologist within Aon Benfield’s Impact Forecasting team, said: “Despite some well documented natural disaster events during the first half of 2014, our data show that losses from both an economic and insured perspective were each below their recent averages. However, a relatively quiet first six months does not mean a similar trend will continue throughout the rest of the year.”
Around 39% of global economic losses sustained during the first half of 2014 were covered by either private or government-sponsored insurance programs, slightly above the 10-year (2004-2013) average of 30%, highlighting that a greater proportion of disaster losses occurred in regions with higher insurance penetration.
The severe thunderstorm peril was the costliest disaster type, accounting for 32% of the economic loss and 46% of the insured loss during the period, and comprising mainly hail and wind events in the U.S. and Europe.
In order of size, the five largest economic loss events in 1H 2014 were Japan winter weather in February ( USD6.25bn); Southern and Eastern European flooding in May ( USD4.5bn); Brazil drought from January to June ( USD4.3bn); U.S. drought from January to June ( USD4.0bn); and severe weather in Europe in June ( USD3.5bn).
In total, 1H 2014 comprised seven separate billion-dollar insured loss events, with four occurring in the U.S., two in Europe, and one in Asia.
Looking ahead to the second half of 2014, Mr. Bowen said: “The third quarter historically is the costliest for natural disasters and is primarily driven by the peak of the Atlantic Hurricane Season. While the pending El Nino is likely to limit the overall number of storms in the basin, it would only take one major landfalling event to quickly make 2014 an above average year for losses – and history suggests that it is just a matter of time before the U.S. endures another major hurricane.”