By Louis Goss
The global insurance sector suffered natural catastrophe losses of more than $100bn (£81bn) for just the fifth time in 2022, after taking a major hit from Hurricane Ian, new research shows.
Natural catastrophes caused $275bn worth of damage in 2022, costing insurance companies $125bn, the research from reinsurance company Swiss Re shows.
The hit marks just the fifth time that insurers have suffered natural catastrophe-related losses of more than $100bn since 1970.
The 2022 loss, however, comes as the third time that insurers have taken a hit worth more than £100bn in the past six years, after the sector took a $121bn hit in 2021 and a $173bn hit in 2017.
Insurers’ losses had previously only surpassed the $100bn threshold on two occasions since 1970, including after the Tōhoku earthquake and tsunami in 2011 and after Hurricane Katrina in 2005.
The major losses seen in 2022 came after Hurricane Ian, which hit the southwest coast of Florida in September, cost the insurance sector estimated sums of between $50-65bn.
This saw Hurricane Ian become the second costliest storm ever recorded, after Hurricane Katrina cost the insurance sector sums equivalent to $62bn in 2005 in today’s money.
The report, however, warns that insurers’ losses will likely continue to rise over the coming years, due to soaring property prices and the accumulation of wealth in disaster prone areas such as Florida’s southwest coast.
“The magnitude of losses in 2022 is not a story of exceptional natural hazards, but rather a picture of growing property exposure, accentuated by exceptional inflation,” Swiss Re’s head of catastrophe perils Martin Bertogg said.
Swiss Re said that inflationary pressures and the continued buildup of wealth and assets in areas heavily impacted by natural catastrophes is set to see insurance sector losses continue rising at rates of 5-7 per cent each year, in line with trends observed over the past 30 years.
Aside from Hurricane Ian, an array of lesser catastrophes imposed multi-billion dollar hits to insurers’ balance sheets.
Specifically, the winter storms Eunice, Dudley and Franklin – that hit Europe at the start of 2022 – cost insurers more than $4bn, while a series of thunderstorms in the US cost the sector $26bn throughout the year.
Major hailstorms in France cost the insurance sector a further $5bn, as floods in South Africa and Australia cost combined sums of $5.8bn.
The post Hurricane Ian sees global insurance sector suffer more than $100bn loss for the fifth time since 1970 appeared first on CityAM.
