Aon Benfield catastrophe update sheds light on major natural disaster costs in region

WikiCommons

The failure of the East Asian summer monsoon has already caused $4.2bn (€3.2bn) of economic loss in China, according to Aon Benfield Asia head of impact forecasting Adityam Krovvidi.

Additional nat cat events in the region have also proved costly, the cat risk-modelling technocrat told GR.

“Seasonally speaking, the Australian cyclone season had Tropical Cyclone Oswald in January, leaving more than $1bn of insured loss … and an active South Asian monsoon started in June, causing more than $250m insured loss in India,” Singapore-based Krovvidi said.

“But these seasonal developments are no big surprises. We have seen similar events occurring in recent times, with the exception of the 2011 Thai floods.”

Mid-year analysis

Krovvidi’s comments follow the release of a mid-year global natural disaster analysis by Impact Forecasting, the catastrophe model development centre at Aon Benfield.

It reveals that natural disasters caused $85bn worth of global economic loss during the first half of 2013. This is about 15%lower than the 10-year (2003-2012) average of $100bn.

Insured losses for the period reached $20bn (2012: $25bn) – about 20% below the 10-year average of $25bn. Roughly 50% of the insured losses resulting from natural disaster events were recorded in the US.

Cover shortfall

Only 24% of global economic losses during the first half of 2013 period were covered by insurance, a figure slightly below the 10-year (2003-2012) average of 28%. This was mainly due to the fact that many significant catastrophe events occurred in areas where insurance penetration or specific peril coverage remained low.

Krovvidi cautioned against complacency during the rest of the year. “With the monsoon active in Asia and the Indo-Australian monsoon around the corner, we should keep our fingers crossed,” he said.