Risk modeller, AIR Worldwide released a report this week, aptly entitled Taking a Comprehensive View of Catastrophe Risk Worldwide, which seeks to answer key questions associated with 2011.
Losses in that year totalled $110 billion, significantly higher that the AIR-generated average of $59 billion. 2012 losses totalled $58 billion. According to AIR’s calculations, there is a 7 percent chance that one of the next 15 years will be as severe in terms of cat losses as 2011.
AIR’s report indicated that natural catastrophe losses from 2011 were not particularly unusual and fall within a range of loss for which the industry should be prepared. Despite the high level of losses, AIR did highlight that not a single re/insurer became insolvent as a result of that year’s cat losses.
The report also seeks to understand whether natural catastrophe events are becoming more frequent and severe. The short answer, according to AIR, is no. According to the report, “increases in natural catastrophe-related losses are primarily driven by the increase in and distribution of exposures in areas susceptible to natural perils.”
Commenting on the report, Bill Churney, senior vice president of AIR, said: “it’s our hope that the report will help companies increasingly concerned about escalating levels of loss to better understand and own their risk.” You can download the full report here.
AIR, cat modelling, Bermuda, reinsurance