Nat cats in 2024 likely to surpass last year’s claims bill – Aon

Natural catastrophe insured losses for 2024 will “likely surpass” last year’s toll, according to a new report from reinsurance broker Aon.

The United States has endured 26 separate billion-dollar events this year, Aon said.

The reinsurance broker said there were at least 280 notable global nat cats in the Q1-Q3 period, resulting in economic losses of at least $258bn and insurance losses of $102bn.

The study, sent from Aon’s ‘Reinsurance Solutions’ arm, estimated that global reinsurer capital neared $700bn as of the year’s halfway point; this figure is forecasted to grow into 2025, provided no substantial catastrophic events will reverse this trend.

Losses from Hurricane Milton and additional events expected in the rest of the calendar year, however, will likely result in total annual insured losses above the $125bn nat cat total insured loss estimate for 2023.

Economic losses for the period were significantly lower than losses during the 2023 period, at $351bn, Aon revealed.

These dynamics resulted in a protection gap of 60%, one of the lowest on record, Aon said.

The broker attributed this “mainly due to the higher contribution of insured losses in the US”, where insurance penetration is highest.

The total number of fatalities from natural disasters to the end of the third quarter was estimated at around 13,000, the lowest annual death toll since 1986, Aon noted.

The report highlighted that insured losses from primary perils during the first nine months of 2024 were relatively low, with no event exhibiting the potential to significantly impact the broader reinsurance market.

Most of the losses, including those from severe convective storms (SCS) as the costliest peril overall, continued to be retained by insurers, prolonging the period of exceptional returns for reinsurers, Aon said.

Third-quarter insured losses were driven by three costly Atlantic hurricanes, SCS outbreaks in the US and Canada, as well as flooding in Central Europe.

The report also revealed that Canada is enduring its costliest insurance loss year on record, with the majority of the impact occurring as a result of four events within one month in Q3, with expected payouts exceeding $5.9bn.

In Asia, Typhoon Yagi – the deadliest event of the year and costliest event on record in Vietnam – became the overall third costliest event in the period under review,” said Michal Lorinc, head of catastrophe insight at Aon.

“Our latest study highlights the complexity of natural catastrophe risk management for organisations, necessitating a myriad of resources around physical measures, warning systems, forecasts, and public awareness,” he said.

“The insurance industry has again played a significant role in this process, with re/insurance covering a high proportion of the global losses so far this year relative to previous periods,” Lorinc added.

The full “Q3 Global Catastrophe Recap October 2024” report is available here.