Total economic losses from natural and man-made disasters fell to around $140 billion in 2019 from $176 billion in 2018, according to Swiss Re AG preliminary sigma estimates, of which $133 billion came from natural catastrophes and $7 billion from man-made disasters.
Meanwhile, global insured losses in 2019 are estimated at $56 billion, down from $93 billion in 2018, and below the annual average of $75 billion for the previous 10 years, the Swiss Re Institute estimated. Insured losses from natural catastrophes accounted for $50 billion, while the remaining $6 billion came from man-made disasters.
Secondary perils, which are smaller and mid-sized loss-generating disaster events, represented over 50% of the insured losses and were responsible for the disappearance or deaths of over 11,000 people worldwide. Swiss Re also warned of an increase in secondary peril events due to climate change, which will result in flooding, torrential rains, prolonged drought, wildfires and other adverse weather events.
Insurance losses were pushed higher due to tropical cyclone activity in the second half of 2019 following a benign first half. However, insured claims from hurricane-struck areas in Mozambique and India were low because of the low insurance penetration in the impacted regions.
Hurricane Dorian, which hit the Bahamas and North Carolina, caused insured losses of about $4.5 billion.
In Japan, a second straight year of elevated typhoon activity reinforced that typhoon winds and flood risks are a major vulnerability for urban regions in the country. Most recently typhoons Faxai and Hagibis generated approximately $7 billion and $8 billion of insured losses respectively.
India, Bangladesh and Nepal faced severe monsoon rains, leading to extensive flooding, while China, the U.S., Europe, Canada and Australia were also struck by repeated flood events.
Past experience is becoming a less definite predictor for future losses amid an increase in macro risk factors, such as population growth and rising property values in exposed areas, said Martin Bertogg, head of catastrophe perils at the Swiss Re Institute.