Filed Under:Agent Broker, Coverage Issues

2017 global insured losses to reach $306 billion, Swiss Re estimates

Insured losses for 2017 to be the third highest on record

Swiss Re says this year's wildfires that devastated parts of northern California contributed to the U.S.'s insured losses, triggering combined insured property losses of $7.3 billion. (Photo: AP Photo)
Swiss Re says this year's wildfires that devastated parts of northern California contributed to the U.S.'s insured losses, triggering combined insured property losses of $7.3 billion. (Photo: AP Photo)

Swiss Re has released its preliminary sigma estimates, estimating total economic losses from natural and man-made disasters in 2017 at $306 billion, the third highest on record. This 2017 estimate is a tremendous increase from $188 billion in 2016.

Global insured losses from catastrophes in 2017 are estimated to be $136 billion, the third highest on sigma records; and 2017 is also the second costliest hurricane season on sigma records after 2005. The U.S. was hit the hardest, with historic losses from hurricanes Harvey, Irma and Maria.

More than 11,000 lives were claimed in catastrophe events this year.

Related: 2017 to be one of the costliest catastrophe loss years ever, Fitch says

Two sides to 2017

Major catastrophe events in the second half of the year are credited as the main cause of 2017’s high number of insured losses. In the first half of 2017, the losses resulting from disaster events were lower than in the same period of 2016, and well below the annual six-month average of the previous 10 years.

The triple threat that was hurricanes Harvey, Irma and Maria brought devastation across much of the southeast and the Caribbean, together creating insured losses estimated at $93 billion with a full assessment of the insured losses still ongoing. The economic losses from these three disasters will be much higher given the significant flood damage – often uninsured – from hurricane Harvey in densely populated Houston, Texas, an extended power outage in Puerto Rico after Hurricane Maria, and post-event loss amplification. 

Related: FEMA's staff 'tapped out' after mounting disasters, leader says

The California wildfires that also occurred in the second half of the year triggered combined insured property losses of $7.3 billion. Three major fire events in October devastated Northern California, hitting the wine country in Napa, Sonoma, Mendocino Lake, Tubbs and Atlas counties. Residential and commercial properties, including wineries and vineyards, were affected. Fires are still raging in Southern California in December, and the as-yet-undetermined full-year losses from wildfires will likely be higher.

Several severe thunderstorms also contributed to the insured loss total. From February to June, five separate severe thunderstorm events resulted in insured losses of more than $1 billion each. The most costly event occurred in Colorado in May, when a 4-day storm created economic losses of $2.8 billion, and insured losses of $2.5 billion.

Across the world 

Major natural disasters occurred across the globe in 2017. Mexico was hit hard by two major earthquakes in September, claiming 370 lives and causing more than $2 billion in insured losses. In Australia’s Queensland and New South Wales areas, Category 4 tropical Cyclone Debbie resulted in insured losses totaling $1.3 billion. Severe floods in southeast Asia caused large devastation and sadly, claimed a large number of lives.

Related: String of natural disasters to impact Mexico insurer profitability

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