Catastrophe losses for 2017 to top $140 billion

JLT Re now expects that the final natural catastrophe incurred loss total for 2017 will exceed $140 billion, making it the largest loss year on record for the insurance industry, the reinsurance brokerage unit of London-based Jardine Lloyd Thompson Group P.L.C. said in a report Thursday.

The report, Natural Catastrophe Year in Review 2017, calls 2017 “a highly anomalous year for the number of significant catastrophe events, particularly across North America.”

The region “bore the brunt of worldwide insured property losses in 2017 … as a result of a record-setting wildfire year, historic Atlantic hurricanes, and escalated losses from severe convective storms,” the report said.

It added that weather volatility is likely to remain an issue into 2018 but forecasting remains a challenge.

“As we look toward the future, the expectation remains that global weather patterns will remain in a heightened state of volatility compared to historical norms,” the report said. “Seasonal forecasts expect a La Niña event to persist into the spring of 2018, but current technology does not offer skillful predictability into late spring or summer.”

Factors that may have a link to increased catastrophe risk include the rise in global sea levels, warmer air and ocean temperatures promoting higher levels of atmospheric moisture, and continued near-record low levels of Arctic sea ice extent.

The report also considers the role of population demographics in the context of growing exposure to peak perils, including weather and earthquake risk, such as how flood and hurricane risk continues to grow for the industry with the large build-up of the insured values near coasts and how wildfire risk is growing as people live in the wildland-urban interface.