The 280 notable global natural disaster events recorded in Q1-Q3 2024 resulted in economic losses of at least USD 258 billion and insured losses of USD 102 billion, the “Q3 Global Catastrophe Recap – October 2024” released by Aon reveals.
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 those seen in 2023 (USD 125 billion). Economic losses for the period were significantly lower than losses during the 2023 period (USD 351 billion).
These dynamics resulted in a protection gap of 60%, one of the lowest on record, mainly due to the higher contribution of insured losses in the United States, where insurance penetration is relatively high compared to other countries.
The total number of fatalities from natural disasters to the end of Q3 was estimated at around 13,000 – the lowest since 1986.
Global economic and insured losses (Q1-Q3 2024)
The report highlights 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.
Third-quarter insured losses were driven by three costly Atlantic hurricanes, SCS outbreaks in the United States and Canada, as well as flooding in Central Europe. Economic losses caused by the Boris flooding in Central Europe are estimated at EUR 5.2 billion.
The report also reveals 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 USD 5.9 billion. Elsewhere, 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.
Michal Lorinc, head of catastrophe insight at Aon, said: “Our latest study highlights the complexity of natural catastrophe risk management for organizations, necessitating a myriad of resources around physical measures, warning systems, forecasts, and public awareness. 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.”
Aon estimates that global reinsurer capital neared USD 700 billion as of June 30th; this figure is forecasted to grow into 2025, provided no substantial catastrophic events will reverse this trend.
Read the full Q3 Global Catastrophe Recap – October 2024 report.
