Insured nat cat losses reach $108bn in first 9 months of 2024: Gallagher Re

In the first 9 months of 2024, losses covered by the private insurance market or public insurance entities totalled at least $108 billion, 5% higher than the decadal average of $102 billion, driven by a higher frequency of low/mid-size events, especially in parts of the world with higher coverage, a new report from Gallagher Re has revealed.

According to the reinsurance broker, global natural catastrophe activity remained “quite active” throughout the first 9 months, despite translating to a near or slightly below-average financial cost.

The minimum $280 billion in economic loss from all natural perils was lower than the most recent 10-year Q1-Q3 average of $309 billion.

Meanwhile, looking solely at weather and climate-related disaster costs, which exclude losses associated with earthquakes, volcanoes, or other non-atmospheric driven events, the economic cost was minimally $264 billion.

This was reportedly lower than the decadal average of $286 billion, though is the ninth consecutive Q1-Q3 with weather/climate-related economic losses at or above $200 billion.

Gallagher Re’s report noted that these estimates do not include the high loss costs emanating from Hurricane Milton, which struck the state of Florida in early Q4 and will undoubtedly increase these figures at year-end.

The reinsurance broker continued, “As we enter the final stretch of the year, there remains focus on what has turned out to be a ‘backloaded’ end to the Atlantic hurricane season.

“While the number of Atlantic storms has been less active than originally forecast, the season has already resulted in five hurricane landfalls in the United States.

“Colorado State University, a collaborative partner with the Gallagher Research Centre, notes that favourable conditions should persist into November. The insurance industry is also adjusting to an increased frequency of major natural hazard events occurring in non-traditional insurance markets.”

Gallagher Re concluded, “The fingerprints of climate change continue to become more evident on individual events. 2024 remains on pace to end as the warmest year ever officially recorded, with land and ocean temperatures measured as the warmest first nine months.”

Chief Science Officer at Gallagher Re, Steve Bowen, commented, “The recent landfalls of Milton and Helene in the United States – coupled with the significant third-quarter impacts from catastrophic flooding events in Europe, Asia, and Canada – underscore the escalating volatility and intensity of weather and climate events.

“The global implication of compounded losses from these events highlights the urgent need for enhanced risk management strategies and innovative insurance solutions to better protect communities. It is clear that the industry and its collaborative partners must join forces to better adapt to this new normal of increasingly intensified natural catastrophe activity.”

Dr Iain Willis, Head of the Gallagher Research Centre, added, “The reality is that the
insurance industry is now having to adjust to the rapidly changing behaviours of natural
catastrophe weather events due to a warming climate.

“We’re already seeing the effects of climate change more clearly now and the insurance industry needs to make the risk modelling of these hazards is keeping pace with their changing frequency and impact.”

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