2017 was a disaster year for global insurers, with record weather-related costs
Updated
Weather disasters cost global insurers $US132 billion in 2017, with Hurricanes Harvey, Irma and Maria making the biggest dent in insurance industry coffers.
A report from reinsurance broker Aon Benfield found 330 natural catastrophes last year caused $US353 billion in economic losses, with 97 per cent of those due to weather-related disasters.
According to Aon, the year's natural catastrophe losses were 93 per cent higher than the average over the previous 16 years.
Hurricanes cause majority of losses
Hurricanes Harvey, Irma and Maria were responsible for 60 per cent of insurance payouts across the year.
Earlier this week, QBE pointed the finger at Hurricane Maria, the Californian wildfires and storms in Australia for hitting the profitability of its underwriting business in the final quarter of 2017.
QBE chief executive Pat Regan labelled the cost of catastrophes as "unprecedented".
"While 2017 was an expensive year for the insurance industry, the traditional reinsurance market was well capitalised to withstand the high volume of payouts," Aon Benfield's Peter Cheesman said.
Bell Potter analyst TS Lim said being prepared was more of an art than a science for the insurers.
"There's never enough reinsurance but you have to trade this off with profits to shareholders," he said.
"I think of all the insurers, IAG is the best prepared, given they cede 32.5 per cent of all risk to the reinsurers."
Cyclone Debbie the costliest disaster in Asia-Pacific
Cyclone Debbie, which hit Queensland in March, was the most expensive event of the year for insurance companies in the Asia-Pacific, according to Aon, and the only natural disaster in the region to cause insured losses of more than $US1 billion.
Widespread flooding was the major cause of damage from Debbie.
"The losses from Cyclone Debbie demonstrate that the key drivers of property damage in cyclones can vary significantly depending on the event," Mr Cheesman said.
The report found 56 per cent of natural disaster losses in Australia were covered by insurance, compared to just 13 per cent across the Asia-Pacific region.
Topics: insurance, storm-disaster, business-economics-and-finance, company-news, australia
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