2018 Natural Disaster Losses 64 Percent Lower Than 10-Year Average

The Aon Reinsurance Solutions Global Catastrophe Recap: First Half of 2018 report reveals that global economic losses from natural disasters for the first half of 2018 were estimated at $45 billion—64 percent lower than the 10-year average of $124 billion and 48 percent lower than the 18-year average of $87 billion. Meanwhile, insured losses were preliminarily estimated at $21 billion—40 percent lower than the 10-year average of $35 billion and 19 percent lower than the 18-year average of $26 billion. These totals are subject to change as losses further develop.

According to the report, there were an estimated 156 natural disaster events in the first half of 2018, which was above the 18-year average of 142. While there was no "mega-catastrophe" that led to economic damage beyond $10 billion, there were at least 15 separate billion-dollar events in the first half of 2018—all of which were weather-related, except 1 earthquake event—led by the United States (6); Europe, Middle East, and Africa (EMEA) (4); Asia-Pacific (APAC) (4); and the Americas (1).

The first 6 months were marked by many smaller-scale disasters, with APAC recording the most disasters in the first 6 months of the year (55). EMEA was second with 44 events, followed by the United States (37) and the Americas (20).

Steve Bowen, impact forecasting director and meteorologist at Aon Benfield, said, "The first six months of 2018 featured several large-scale disasters with at least 15 individual billion-dollar economic loss events around the world. However, the resultant losses were largely manageable for the re/insurance industry. While first-half losses were lower than average, it is imperative to reiterate that this does not automatically correlate to a quieter second half. As last year proved on multiple occasions, even one singular event can completely change the trajectory of a year from a humanitarian and financial cost perspective. Identifying and understanding your individual level of risk remains an important asset in helping to mitigate potential impacts given the prospect of future events."

Insured losses resulting from natural catastrophes were generally lower than the average and median of the past 18 years. On a regional level, only EMEA and the Americas were each higher than their respective mean and median during that time frame, with EMEA elevated due to an active European windstorm season and the Americas largely due to winter storm and severe weather events in Canada. Both APAC and the United States saw lower insured losses, largely the result of a less-active severe weather season in the United States and a quieter start to seasonal monsoon flooding across parts of Asia.