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Global insured and economic losses from natural catastrophes and man-made disasters in the first half of 2019 are tracking lower compared to the same period last year, according to a report published by Swiss Re Institute.
Overall, global insured losses from disasters totaled $19 billion in the first half of this year, down from $26 billion in the first half of 2018, according to the report published Thursday. The global insured losses from natural catastrophes fell to $15 billion compared to $21 billion the year before, while insured losses from man-made disasters decreased to $4 billion from $5 billion.
Of the $44 billion in total global economic losses in the first half of 2019, $40 billion were related to natural catastrophes while the other $4 billion in losses were caused by man-made disasters. But overall global economic losses are well below $109 billion, the average first-half economic losses of the previous 10 years, and also lower than the $51 billion reported for the same period a year earlier.
Only about 42% of the global economic losses were insured – compared with 52% in the first half of 2018 – as several large-scale disaster events such as cyclone Idai in southern Africa and cyclone Fani in India, occurred in areas with low insurance penetration, according to the report.
Cyclone Idai, which caused strong winds and severe flooding across Mozambique, Malawi, Zimbabwe and Madagascar, was the deadliest natural catastrophe in the first half of this year, with more than 1,000 fatalities. Economic losses from cyclone Idai are estimated at least at $2 billion, of which only about 7% were insured.
"The experience of the first half of this year has once again exposed the existing protection gap issues in emerging countries,” Martin Bertogg, head of catastrophe perils at Swiss Re in Zurich, said in the report. “For example, cyclone Idai showed just how fragile African coastal communities are. And in India, cyclone Fani inflicted widespread damage and large uninsured losses.”
Secondary perils such as thunderstorms, torrential rains and snowmelt caused the highest losses through wind and water damage in the first half of 2019 in many regions of the world, including the United States, Canada, Europe, Australia, China and Iran, according to the report. Swiss Re Institute's sigma estimates the total economic losses of these events at $32 billion – about $13 billion of these losses were insured.
Several parts of the world also experienced heatwaves and dry weather conditions this year, with temperature records broken in several locations, particularly in Europe. The full impact of the extreme summer weather is yet to be determined, according to the report.
"Intense heatwaves and dry spells of the like we've seen over the last few years are expected to become more frequent, exacerbating the conditions conducive to wildfires and agriculture losses,” Mr. Bertogg said. “We also expect more variable rain patterns, as rising temperatures load the atmosphere with more vapour. Society will need to adapt and prepare for these increasing occurrences."
A report said that insurance rates are likely to rise in New Zealand this year due to increased regulatory oversight, lack of competition and global catastrophe losses, Asia Insurance Review reported. The report by U.K.-based insurance broker Willis Towers Watson P.L.C. said that insurers are likely to write business selectively and increase risk evaluation in property, directors' and officers' liability and professional indemnity among other segments.