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Insured losses from global natural disasters totaled $130 billion in 2021, with the United States accounting for 71%, Aon PLC said in a report Tuesday.
It was the second consecutive year that the U.S. share topped 70 percent, with the combined U.S. insured loss total in 2020 and 2021 at $176 billion – the highest two-year total on record, Aon said.
Extreme weather events, some of which were heightened by climate change, were particularly notable in the U.S.
Hurricane Ida, which made landfall last August, resulted in $36 billion in insured losses for public and private insurers. The February Polar Vortex event that impacted North America also resulted in a $15 billion insured loss, Aon said.
So-called “secondary perils,” including severe convective storms, wildfires, flooding, winter weather or drought, are more frequently driving annual loss years, Aon said in the report.
“Years dominated by “primary” perils (tropical cyclone and earthquake) are occurring with less regularity, though it does not minimize the potential risk,” the report said.
The trend suggests that the terms “primary” and “secondary” are increasingly “out of step” since many of the largest secondary peril events in the last decade have resulted in a $10 billion insured loss, according to the report.
A high number of severe convective storms, including a December tornado outbreak and derecho resulted in the third-costliest year on record for U.S. insurers, Aon said.
Record heat and drought conditions set the stage for wildfires that led to a multi-billion-dollar insured loss. This included major fire events in California and Colorado.
Fourth-quarter catastrophe losses are expected to be manageable for the U.S. insurance industry as the impact of economic and social inflation on loss costs and pricing will remain key topics for commercial lines insurers, according to a report Friday from BofA Securities Inc., a global brand for BofA Global Research.