The first six months of 2023 featured above average natural catastrophe losses as NOAA declared the official arrival of El Niño which was poised to bring further influence on global weather/climate events through the end of the year, according to Gallagher Re. Total direct economic losses from natural hazards were preliminarily estimated at $138B. The cost covered by private insurance or public insurance entities tallied $52B. This marked a protection gap of 63% ($86B). The H1 totals for solely weather/climate events (excluding earthquakes or other non-atmospheric-driven perils) were $92B (economic) and $46B (insured). These totals, which may be rounded in some cases, are subject to change as loss development occurs and new data is obtained in the weeks and months ahead.
The severe convective storm (SCS) peril was highly dominant for the insurance industry in H1 2023. A very active multi-month pattern spawned a prolific series of outbreaks across the US that led to a minimum of $34B in insured losses. This represented 65% of all global H1 insured losses. At least 812 confirmed tornadoes touched down, though hail was the dominant damage cost driver with NOAA’s Storm Prediction Center (SPC) recording at least 729 individual instances of hail larger than 2.0 inches (5.1 centimeters) in diameter striking US communities. For all perils, the US accounted for 76% of global insured losses; but just 38% of global economic losses. Thunderstorms in Europe during June brought a billion-dollar insurance bill to parts of Germany and France.
Other parts of the world also experienced significant natural hazard activity. The confirmed death toll from the February sequence of historic earthquakes in Turkey and subsequent impacts in Syria rose above 59,250 as the insured cost topped USD5B. New Zealand continued to count the cost of its two costliest weather events on record—that occurred in a matter of weeks’ time in January and February—which led to at least USD2.3B in combined insured losses. Italy’s Emilia-Romagna region saw record-setting rainfall in May that left a minimum direct economic toll of USD9.7B. Anomalously warm conditions fueled by an influence from the transition to El Niño and the influence of climate change aided in the ignition of catastrophic wildfires in Canada, amplified severe drought conditions in South America, Europe, and Asia, and heatwaves left hundreds of people dead in parts of North America and Asia. Heavy precipitation from the seasonal monsoon and the remnants of Cyclone Freddy left more than 2,500 people dead in Africa.
Insured Loss
The total H1 insured loss was 18% higher than the decadal average (USD44B) and 39% above the 21st Century average (USD38B).
The SCS peril dominated insurance industry payouts, with the total (USD35B) representing 69% of natural hazard-related claims payouts. The US minimally incurred its second costliest H1 for the SCS peril on record. Other countries set new individual records for weather events. New Zealand recorded its two costliest weather events in January and February following torrential rains and the remnants of Cyclone Gabrielle. The combined cost was minimally estimated at USD2.3B. Italy’s Emilia-Romagna region endured prolific rains that led to extensive flooding and an expected insured loss tally minimally into the hundreds of millions (USD) which could set a record for a weather event in the country’s history. There were at least 17 natural catastrophe events which topped USD1B in insurance payments, including 13 alone in the US. 16 events were weather/climate related.