A series of hailstorms and tornadoes in the U.S. dominated the natural catastrophe statistics in the first half of 2017, says Munich Re, a global reinsurer. A total of six severe, large-scale thunderstorms were recorded, each causing billions of dollars of losses.
Worldwide "nat cat" losses from January to June, however, were below average.
Overall losses came to $41 billion. The corresponding figure for the first six months of 2016 was $111 billion. The average for the last 10 years was $102 billion. Insured losses totaled $19.5 billion (previous year: $32 billion; 10-year average $29 billion).
With less than half of the losses uninsured, the share of insured losses was higher than usual, Munich Re says. This is due to the major thunderstorm losses in the U.S., where insurance density is high. The previous year, and the 10-year average, saw more than two thirds of losses uninsured.
The highest overall losses in the first half-year were caused by the floods in Peru in February and March with a figure of $3.1 billion, some $380 million of which was insured. The costliest event for insurers was a thunderstorm in the U.S. in early May, with insured losses of $1.8 billion and overall losses of $2.2 billion.
In Europe, the overall losses of $5 billion (€4.4bn) and insured losses of $1.9 billion (€1.7bn) were also below the average ($13.4 billion and $4.7 billion). One year earlier, the headlines had been dominated by a series of flash floods and river floods in Germany and France. Nat cat losses in Asia/Pacific and Australia in H1 2017 totaled $9.2 billion, with $2.1 billion of these insured.
By the end of June 2017, Munich Re’s NatCatSERVICE database had recorded 350 loss-relevant natural catastrophes, less than the previous year’s figures (390) but more than the 10-year average (310).
The high number of severe thunderstorms in the U.S. is presumed to have been at least partially influenced by a natural climate phenomenon, especially in the first quarter of 2017: the tropical eastern Pacific off the northwest coast of South America was exceptionally warm, a phenomenon that the Peruvian authorities have dubbed “coastal El Niño." At the same time, it was significantly cooler than usual further west. This difference in temperature can cause teleconnection events that alter the atmospheric circulation over the U.S., increasing the likelihood of a large number of severe thunderstorms with tornadoes and hail.
Thunderstorms in the U.S. were responsible for three of the world’s five costliest loss events in the first half of the year, each causing economic losses of over $2 billion. The total economic loss from these storms amounted to $18.5 billion, of which $13.5 billion was insured.
The coastal El Niño phenomenon was also responsible for the costliest economic loss in the first half-year, the February and March floods in Peru. High sea temperatures and the subsequent increase in evaporation rates brought torrential rainfall to Peru, triggering numerous landslides and river floods close to the capital city of Lima and in rural areas in the north of the country.
Overall losses came to $3.1 billion. Due to the low insurance density in Peru, the insured loss was only a tenth of this figure, at $380 million. “Emerging countries in particular would benefit from higher insurance density as it would allow them to recover more quickly from the financial impact of natural disasters”, Munich Re says.
Cyclone Debbie, which hit the Queensland coast of Australia in late March, was the second-most expensive nat cat event of H1 2017, with overall losses of $2.7 billion and insured losses of $1.4 billion. Debbie made landfall on March 28 in the sparsely populated area around Airlie Beach. It was a category four cyclone (second-highest category) with wind speeds of up to 190 km/h (gusts up to 260 km/h). High winds and torrential rain damaged countless buildings.