According to reinsurance broker Gallagher Re, 2024 saw natural catastrophes and severe weather driving an estimated $154 billion of losses to the private and public insurance markets, leading the company to suggest a new normal of $150 billion of annual catastrophe losses is approaching.“In 2024, the estimated total direct economic costs from global natural perils were USD417 billion.The private insurance market and public insurance entities covered USD154 billion of that total,” Gallagher Re explained.Adding that, “The annual average loss from natural catastrophes from 2017 to 2024 has cost insurers USD146 billion.

This suggests a ‘new normal’ approaching USD150 billion per year.” It seems like only a handful of years since $100 billion was being discussed as the new normal for annual natural catastrophe losses for the global insurance and reinsurance industry., Steve Bowen, Chief Science Officer, Gallagher Re had said, “We’ve reached the point where annual insured losses topping USD100 billion should be assumed as a new normal.” Gallagher Re’s Bowen explained in the new report from the company on 2024 catastrophe loss activity, “With each year we continue to witness an increase in the severity and high-impact frequency of natural catastrophe events in expected, and increasingly unexpected, parts of the world.“While the (re)insurance industry remains in strong position to withstand these higher aggregated loss costs, we face a new growing reality.

The complex challenges arising from these events is accelerating the need to better identify how physical and non-physical risk profiles are evolving.We must also recognize the various ways these risks are increasingly linked together.” For 2024, global insured losses of $154 billion were some 27% above the recent 10-year average (2014-2023) of $121 billion.Meanwhile, the estimated direct economic cost of natural hazards was $417 billion, indicating the still wide insurance protection gap which stood at 63% for 2024.

Last year there were at least 60 individual billion dollar economic loss events, more than 30 of which caused billion dollar losses for the insurance and reinsurance market.Some 76% of the global insured catastrophe loss total came from the United States in 2024, accounting for 76% of the total for the year.Non-peak perils made up 57% of the annual total in 2024, which is slightly below the ten-year average of 60%, Gallagher Re explained.

In terms of major events, Gallagher Re now estimates both hurricanes Helen and Milton as $20 billion insured loss events.But severe convective storms again made up a significant proportion of the annual insured catastrophe loss total, with Gallagher Re saying, “At least 41% of insured losses (USD64 billion) resulted from the severe convective storm (SCS) peril.“SCS events in 2023 and 2024 have now cost global insurers a remarkable USD143 billion, of which USD120 billion occurred in the US alone.” On SCS losses for the United States the broker added, “The peril as it stands now has transitioned to a ‘new normal’ in which annual nominal insured losses exceed USD4+ billion.”.

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