Nat cats cost global economy $75 billion in 1H 2020

Published by Impact Forecasting, Aon’s catastrophe model development team, a report reveals that global natural disaster events during 1H 2020 caused total economic losses estimated at $75 billion – 25 percent lower than the 2000-2019 average of $98 billion. Meanwhile, insured losses were estimated at $30 billion – five percent higher than the 20-year average of $28 billion. These totals are preliminary and will change as losses continue to develop.

Natural disasters were responsible for approximately 2,200 fatalities during the first half of 2020, significantly below the long-term (1980-2019) average of 39,800 and the median of 7,700. Flooding was the deadliest natural peril during the period, having been responsible for 60 percent of the death toll.

The total of 207 global natural disaster events was above the 20-year average of 184 and the median of 189. There were at least 20 separate billion-dollar economic events during the first half of the year – led by the United States with 10 events; Asia Pacific (APAC) with five events; Europe, Middle East and Africa (EMEA) with three events, and the Americas with two events.

Cyclone Amphan, which killed 133 people in India in May, was the costliest economic event of 1H 2020, causing an estimated $15 billion in direct damage loss. A severe weather event in the US from April 10-14, which killed 38 people, was the costliest insured event, with claims totaling nearly $3 billion.

The first six months of the year were marked by many smaller- and medium-scale disasters, which impacted a large number of communities globally. From a peril perspective, there was an unusually low number of significant earthquakes in 1H 2020.

Steve Bowen, director and meteorologist on the Impact Forecasting team at Aon’s Reinsurance Solutions business, said: “The first half of 2020 was challenging on a number of fronts given the ongoing effects of COVID-19 and a series of impactful weather and climate-related events around the world.”

”Much of the natural disaster impact came via the severe convective storm peril. A record 10 individual thunderstorm-related events had more than $1 billion in economic losses in the United States alone during the first six months of the year; while Australia and Canada each dealt with severe hailstorms that prompted billion-dollar damage bills.”

”Early season tropical cyclones such as Amphan in India and Bangladesh, wildfires in Australia, windstorms in Europe, and record-setting heat in the Arctic Circle were also notable in the first half of the year. While first-half losses do not show a direct correlation to the second half of the year, the looming peak of Atlantic Hurricane Season as La Niña conditions are anticipated to arrive, only enhances the need to be mindful of natural hazard risk in the months to come.