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1 February 2021
Hurricanes, floods, hailstorms and other severe weather-related events made up more than 90% of the $US268 billion ($349 billion) in natural peril losses last year, an annual review from Aon says.
About $US97 billion ($126 billion) of the global loss bill was insured, a 26% increase from 2019 and marking the fifth-costliest year for insurance entities.
Weather-linked disasters, which led to $US258 billion ($336 billion) in damages, accounted for 99% of the insured losses.
Severe convective storms – the technical term for thunderstorms – were the main driver of insured losses at $US42 billion ($55 billion), representing more than 43% of the claims payout. There were 14 individual billion-dollar severe convective storms last year, the highest number of record for any peril, of which 12 occurred in the US.
“This is aligned with the overall increasing trend for the peril throughout the 21st Century,” Aon said. “It is worth noting that more than 80% of the loss was incurred in the US alone, which was amplified by a major derecho event in August.” (Derechos are large and fast-moving thunderstorms with powerful straight-line winds that cause widespread destruction.)
Tropical cyclone, including last year’s Atlantic hurricane season - the most active on record with 30 named storms - was the costliest individual peril with economic losses of $US50 billion ($65 billion).
Hurricane Laura, the strongest storm to make landfall in the US state of Louisiana in more than 150 years, was the costliest insured event at $US10 billion ($13 billion). Next was the severe convective storms that hit the US, at $US8.3 billion ($10.8 billion).
The top 10 insured events occurred in the US, which accounted for 76% of losses borne by the insurance industry.
The series of hailstorms that affected parts of eastern Australia in January last year were among the 28 individual billion-dollar natural disaster events in terms of insured losses.
Outside of the US, Australia experienced the most damage caused by severe convective storms, with claims payouts of nearly $3.5 billion ($4.6 billion).
“Australia is one of the most active regions in the world for thunderstorms… [and] the most damaging sub-peril for the insurance industry from these convective storms typically comes from hail,” the report says.
“The challenge for Australia is that a majority of the population live in communities located within close proximity to the coast.
“Enacting mitigation strategies via retrofitting properties with better performing roofs or siding will not fully eliminate risk, but can help reduce future costs.”
Click here to download the report.