2024 nat cat insured losses to exceed 2023

Insured losses from catastrophes are likely to exceed the $125 billion experienced in 2023, Aon has predicted. 

The re/insurance broker said insured catastrophe losses through the end of the third quarter from at least 280 natural disasters were $102 billion and economic losses were $258 billion, but the effect of Hurricane Milton this month and other events meant insured losses would be higher than in 2023.  

The reported noted that economic losses were lower than in the first none months of 2023, when they reached $351 billion. In 2024, the protection gap was 60%, one of the lowest on record, "mainly due to the higher contribution of insured losses in the United States, where insurance penetration is relatively high compared to other countries".

The total number of fatalities from natural disasters to the end of the third quarter was estimated at around 13,000 – the lowest since 1986.

The report said insured losses from so-called primary perils during the first nine months of 2024 were relatively low. "Most of the losses, including those from severe convective storms as the costliest peril overall, continued to be retained by insurers, prolonging the period of exceptional returns for reinsurers," Aon said. 

The report also revealed that Canada is enduring its costliest insurance loss year on record, with the majority of the impact occurring as a result of four events within one month in Q3, with expected payouts exceeding $5.9 billion. Typhoon Yagi – the deadliest event of the year and costliest event on record in Vietnam – became the overall third costliest event in the period under review.

Michal Lorinc, head of catastrophe insight at Aon, said: “Our latest study highlights the complexity of natural catastrophe risk management for organisations, necessitating a myriad of resources around physical measures, warning systems, forecasts, and public awareness. The insurance industry has again played a significant role in this process, with re/insurance covering a high proportion of the global losses so far this year relative to previous periods.”

Aon estimates that global reinsurer capital neared $700B as of June 30th; this figure is forecasted to grow into 2025, provided no substantial catastrophic events will reverse this trend.

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