Insured nat cat losses of $78bn for 2020 could have been much worse: Willis Re

Insured losses from major natural catastrophes amounted to around $78 billion in 2020, according to Willis Re.

It makes 2020 the fourth largest year for cat losses since 2011, the figure being around 17 percent higher than the ten-year average of $66.5 billion. In 2017 losses came in at $143 billion, compared to $120 billion in 2011 and $80.5 billion in 2018.

Willis Re pointed out the figures do not reflect high levels of storm activity, because multiple hurricanes and tropical cyclones skirted major built-up areas, according to Willis Re’s  Summary of Natural Catastrophe Events 2020. There were 30 named storms in the 2020 hurricane season, but relatively few made landfall, with most of the losses caused by small and medium-sized events.

In Europe, windstorm Ciara (Sabine) caused nearly $2 billion of insured losses across more than ten countries, amongst several other storms that caused lesser damage, concentrated in a two-week period.

In Asia, Tropical Cyclone Haishen caused under $1 billion of insured losses, well below those caused by similar storms during 2019’s cyclone season. The largest event of 2020 in Latin America and the Caribbean was hurricane Iota in November, with an estimated economic loss of about $1.3 billion, but a much lower insured loss.

Yingzhen Chuang, regional director of  catastrophe analytics at Willis Re International, noted that things could have been a lot worse in 2020, given the level of activity. “Fortunately, despite an active Atlantic Hurricane season, landfalls were limited,” he said.

A number of earthquakes served as a reminder of the seismically active nature of southern Europe, he added, as well as severe flooding from windstorms and hailstorm activity. “During a year when Covid-19 dominated catastrophe loss discussions, there were nevertheless a series of smaller but impactful natural catastrophe events,” he said.

Vaughn Jensen, executive vice president of catastrophe analytics at Willis Re North America, warned: “The sheer number of storms – and the continued incidence of billion-dollar wildfires in the US and elsewhere, plus the severity of the Iowa derecho event – gives the industry cause to consider new emerging trends.”