Weather- and climate-related extremes caused economic losses estimated at EUR 560 billion in the EU between 1980 and 2021, of which only EUR 170 billion (30%) were insured. Nearly 195,000 fatalities have been caused by floods, storms, heat- and coldwaves, forest fires and landslides. Heatwaves caused over 87% of the total number of fatalities from extreme weather events between 1980 and 2021.
As Nat Cat business has become largely loss-making in recent years after many years of soft market, global reinsurers are cutting back on the cover they provide against medium-sized natural catastrophe risks, mostly by tightening T&C, Fitch Ratings says, adding that under the investors’ pressure reinsurers are looking now to other parts of the market showing better profitability.
Secondary perils, namely the natural risks producing small to mid-sized loss events, were initially called so to diferentiate them from the primary perils, those of catastrophic dimensions and nature as earthquakes and huricanes. Nowadays, their cumulated impact became similar to a “Death by a Thousand Cuts” scenario, an article of Moody’s RMS blog reads.
Severe convective storms – storms associated with thunder, lightning, heavy rain, hail, strong winds and sudden temperature changes – caused USD 35 billion, nearly 70% in insured losses worldwide in the 1H 2023. This means that insured losses are almost twice as high in a six-month period as the annual average of the last ten years (USD 18.4 billion), Swiss Re said in a recent article.
According to Global Catastrophe Recap: First Half (1H) of 2023 recently published by Aon, economic losses stemming from global natural disasters are estimated at USD 194 billion. “Notably, this is above the 1H average of USD 128 billion for the 21st century, the fifth highest on record and the highest since 2011”.
The broader market trends seen at January 1 continued at mid-year renewals, but with improved timing and concurrence around terms and conditions. While property pricing saw continued risk-adjusted rate increases in many segments, the average change moderated from January 1, according to reinsurance broker Guy Carpenter, part of Marsh McLennan.
While 1H 2023 is a continuation of the recent run of years with high losses, insured losses continue to account for less than 40% of overall losses, confirming the large insurance gap that persists in many countries for multiple natural hazards. Insurers bore around 35% of worldwide losses in terms of the average half-year losses in the period 2013–2022, Munich Re said.
According to Swiss Re Institute, global insurance premiums, both in non‑life and life, are estimated to grow by 1.1% in 2023 and by 1.7% in 2024. Premium volumes are expected to total a new peak of USD 7.1 trillion in 2023, compared to USD 6.8 trillion in 2022.
Gains in human longevity have tapered off over the last decade but the next wave of improvements is on its way, says Swiss Re's latest report, The future of life expectancy: Forecasting long-term mortality improvement trends for insurance.
Advances in cancer diagnosis and treatment are the most likely areas to improve global longevity, according to the report. Future improvements will need to be supported by addressing older-age health issues such as Alzheimer's, lifestyle factors and access to healthcare.
The Ukrainian Insurance Business Association participated in Insurance Sweden Annual Conference 2023: Crisis and war - what is the role of the insurance industry? Vyacheslav Chernyakhovsky, general director of the association, presented the topic "How do insurance companies handle the challenges of an ongoing war".
Allianz has published its latest Global Insurance Report, analyzing the development of the insurance market in the world. Here, in brief, the report's findings, as summarized in its introductive chapter.
Year-on-year inflation in the OECD as measured by the Consumer Price Index (CPI) fell slightly to 9.2% in January 2023, down from 9.4% in December. Declines in inflation between December 2022 and January 2023 were recorded in half of the OECD countries, compared to two-thirds between November and December 2022. The highest inflation rates were recorded in Hungary, Latvia, Lithuania and Turkiye (all remaining above 20%).
Inflation remains a key concern for European insurance CFOs, followed by a downbeat economic outlook and market volatility in 2023, according to Moody's
annual survey of chief financial officers (CFOs) from 22 leading European insurers.
Challenging times for the automotive industry. From lingering supply chain disruptions to global food shortages and the energy crisis, the economic landscape has been cumbersome, and companies worldwide have had to adapt to this complex new environment.
An analysis published by the Polish member of the Vienna Insurance Group family, insurer Compensa, highlihts 5 events that had a major impact on motor insurance in 2022, also anticipating some of 2023 trends in the Polish motor insurance business. As these trends are largely common to many markets across the CEE region, we are offering an English version of it.
The current financial and economic uncertainty, as well as the rising cost of living, may lead policy makers, regulators and supervisors to postpone reforms that could improve their pensions systems. However, delaying needed reforms would put at risk the well-being of current and future pensioners. Policy makers should continue to improve pension systems, according to a new OECD report.
Insurers' exposures to macro and market risks are currently the main concern for the insurance sector, is the finding of EIOPA's Risk Dashboard based on Solvency II data from the second quarter of 2022. All other risk categories, such as profitability and solvency, climate as well as digitalization and cyber risks stay at medium levels.
German insurers recently warned consumers not to engage in risky "experiments" as they try out makeshift alternatives to heat their homes as the nation navigates an energy crisis, Reuters said.
Insurers may need to focus on maintaining customers, even if that does result in profit declining in the short term, as SMEs are struggling the ongoing cost-of-living crisis, which is likely to heavily impact the commercial insurance sector making renewals and keeping penetration rates up a challenge, GlobalData says.
"Nothing undermines sustainable development like disasters," asserted United Nations Secretary-General Antonio Guterres in hir foreword to the sixth edition of the United Nations Global Assessment Report on Disaster Risk Reduction 2022 - "Our World at Risk: Transforming Governance for a Resilient Future comes at a critical time for the future of humanity."