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First-quarter natural catastrophe insured losses were estimated to be at least $22 billion, with overall economic losses pegged at $77 billion, according to a report Wednesday from Gallagher Re, the reinsurance business unit of Arthur J. Gallagher & Co.
The economic losses figure represents the highest first-quarter total since 2011, according to a statement released with the report. These estimates are subject to change as standard loss development occurs and new data is obtained, the report said.
Weather or climate-related catastrophes, excluding earthquake, wrought $17 billion in insured damages and $31 billion in economic losses. These losses were driven by the most expensive first quarter on record for U.S. severe convective storm activity, which caused $10 billion in insured losses and $13 billion in total economic losses. Flooding events in New Zealand also contributed.
“The high-dollar loss costs observed in Q1 2023, including those from notable thunderstorm and flood-related events, were marked by notable gaps in insurance coverage across both developed and emerging economic territories,” Gallagher Re Chief Science Officer Steve Bowen said in the statement.
The largest driver of economic losses was the magnitude-7.8 earthquake that struck Turkey and Syria on Feb. 6, causing direct physical damage costs likely to approach $45 billion according to an initial high-end financial assessment from the World Bank, the report said. Total insured losses are estimated to approach $5 billion,” the largest industry loss for the Turkey market on record, according to the statement.
The report said that despite a requirement to purchase residential earthquake insurance, only 49% of homeowners in the 11 hardest-hit Turkish provinces had active policies from the Turkish Catastrophe Insurance Pool, Gallagher Re said.
“The Turkey earthquake sequence was a difficult reminder of the significant vulnerabilities that exist to life and property from seismic events,” Mr. Bowen said.
“As the private and public sectors work together to develop a more resilient and adaptive society to current and future climate change risk, it is imperative that all natural hazard types, and not just weather or climate perils, are considered in the planning discussions.”
Last week Aon PLC reported that insured natural catastrophe losses had reached $15 billion for the first quarter.