Devastating hurricanes, earthquakes and wildfires pushed global economic losses up 63 percent to $306 billion in 2017, Swiss Re says.
Disasters in 2017 caused an estimated $306 billion in total economic losses and produced global insured losses that made it the third-most expensive year for the industry, according to figures released Wednesday by Sigma.
The report by the research arm of reinsurance giant Swiss Re said the U.S. felt the biggest impact, reflecting devastation from Hurricanes Harvey, Irma and Maria. It said 2017 produced the second-costliest hurricane season, after 2005, the year of Hurricane Katrina. The second half of the year was especially high for economic and insured losses, coming after the three major hurricanes and wildfires in California.
The estimated global economic losses of $306 billion from natural and man-made disasters in 2017 represents a 63 percent jump from $188 billion in 2016. Natural disasters represented about $300 billion of the total, while man-made disasters another $6 billion.
The report also estimated that global insured losses from disaster events in 2017 totaled about $136 billion, or more than double than $65 billion tallied last year.
Overall, 2017 ranks as the third-most expensive year for insured losses. The most expensive year on record remains 2011, when the Japanese earthquake and tsunami disaster struck. It is followed by 2005, reflecting three devastating hurricanes — Katrina, Rita and Wilma.
According to Swiss Re, this year's global insured losses exceeded the industry's 10-year annual average of $58 billion.
"In recent years, annual insurance losses from disaster events have exceeded $100 billion a few times", said Martin Bertogg, head of catastrophe perils at Swiss Re. "The insurance industry has demonstrated that it can cope very well with such high losses. However, significant protection gaps remain, and if the industry is able to extend its reach, many more people and businesses can become better equipped to withstand the fallout from disaster events."
This year's Harvey, Irma and Maria hurricanes together caused insured losses estimated to be roughly $93 billion, the report said. Devastation included the impact of Harvey in Texas, the devastation in Puerto Rico after Maria and losses after Irma made landfall in Florida.
"There has been a lull in hurricane activity in the U.S. for several years", said Kurt Karl, Swiss Re's group chief economist. "Irrespective, there has been a significant rise in the number of residents and new homes in coastal communities since Katrina, Rita and Wilma in 2005, so when a hurricane strikes, the loss potential in some places is now much higher than it was previously."
Swiss Re also said five separate thunderstorms in the U.S. from February to June caused losses totaling more than $1 billion each.
A Swiss Re spokesperson said it had no estimate for total U.S. catastrophe losses in 2017, noting that the devastating wildfires in Southern California are still ongoing and are also not yet included in the year's estimated losses.
The so-called Thomas fire in Ventura and Santa Barbara counties has already destroyed more than 1,000 structures and claimed at least two lives, including a firefighter. The massive fire, which already ranks as the second-largest wildfire in California history, is 60 percent contained and expected to burn into January, according to Cal Fire.
Earlier this month, the California insurance commissioner reported that the wine country wildfires in October resulted in residential and commercial claims that top $9.4 billion. Those wildfires in Napa, Sonoma and several other Northern California counties caused damage to more than 21,000 homes, 2,800 businesses and more than 6,100 vehicles. There were also 44 fatalities in the wine country wildfires.
According to Swiss Re, more than 11,000 people died or left missing in catastrophe events this year. That includes about 8,250 people from natural catastrophes and 3,078 fatalities in man-made disasters.
Besides the hurricanes and wildfires, two major earthquakes in Mexico in September killed more than 100 people and monsoon flooding in South Asia caused at least 1,200 deaths this summer. Also, mudslides in Sierra Leone killed more than 1,000 people.