Source: insurancebusinessmag.com

Global economic losses for natural disasters hit an estimated US$77 billion (about £61.9 billion) in the first quarter – the highest Q1 total in a dozen years, according to a new report from Gallagher Re.

Public and private insurance entities covered an estimated $22 billion in losses, leaving a 72% (US$55 billion) protection gap, according to Gallagher Re’s Q1 2023 Natural Catastrophe Report.

When focusing solely on weather or climate-related disasters, which excludes earthquake peril, economic losses were estimated at a minimum of US$31 billion in Q1, the report said. Of that, public and private insurers covered US$17 billion – slightly more than half. The majority of the losses were associated with record severe convective storm activity in the US – which caused economic losses of more than US$13 billion and insured losses of more than US$10 billion – a series of atmospheric river events in California, flooding in New Zealand, and an ongoing drought across South America.

Damages from the February earthquakes in Turkey and Syria cost an estimated US$45 billion, the report found. Of that, total insured losses are estimated to approach US$5 billion, the largest industry loss on record for the Turkey market.

“The Turkey earthquake sequence is a difficult reminder of the significant vulnerabilities that exist to life and property from seismic events,” said Steve Bowen, chief science officer at Gallagher Re. “As the private and public sectors work together to develop a more resilient and adaptive society to current and future climate change risk, it is imperative that all natural hazard types, and not just weather or climate perils, are considered in the planning discussions.

“The high-dollar loss costs observed in Q1 2023, including those from notable thunderstorm and flood-related events, were marked by notable gaps in insurance coverage across both developed and emerging economic territories,” Bowen said. “This highlights the continued opportunity to develop tools and products that not only identify or quantify risk, but to make meaningful strides to ensure equitable protection for communities around the world.”