This report provides an overview of the losses and damages caused by natural catastrophes and man-made disasters in 2018.
Total economic losses from natural catastrophes and man-made disasters were USD 165 billion. Insurance covered USD 85 billion, the fourth highest one-year aggregate industry payout ever. Man-made disaster-related insurance claims were close to USD 9 billion, up from USD 7 billion in 2017. The combined insurance losses from natural catastrophes in 2017 and 2018 were USD 219 billion, the highest-ever for a two-year period. For natural catastrophes, more than half of losses and the largest insured losses were due to "secondary" perils.
Secondary perils come in two forms:
- independent, high-frequency (i.e., more frequent than primary peril events like earthquakes and hurricanes), low-to-medium severity loss events; and
- events that occur as secondary effects of primary perils (e.g., a tsunami after an earthquake).
Losses from secondary perils have been rising due to rapid development in areas exposed to severe weather and warmer temperatures. It is a trend expected to continue given ongoing urbanisation in areas exposed to flood and fire risk, among others, and because of climate change.