Catastrophe modelling firm AIR Worldwide has released its 2020 Global Modelled Catastrophe Losses report, detailing key loss figures from AIR’s global industry exceedance probability curve. Based on the report, AIR estimates that the global modelled insured average annual loss from catastrophes worldwide is nearly US$100bn. The 1% aggregate exceedance probability insured loss (or the 100-year return period loss) is nearly US$301bn.
2020 began with the most powerful earthquake Puerto Rico had experienced since 1918 - the last time the island updated its earthquake preparedness plan. Also in January, numerous bushfires continued to burn across Australia. Since the second half of 2019, the fires had scorched more than 10m hectares.
June 13th saw one of Canada’s costliest natural disasters when the Calgary hailstorm struck. August brought the Complex Fire, which became the largest wildfire in California’s history and the first-ever ‘gigafire’, so called because it burned more than 1m acres. On August 10, a derecho storm caused widespread catastrophic damage in the US Midwest, bringing heavy rainfall, hurricane-force winds as well as significant hail in some locations. The Atlantic hurricane season has also brought a record-breaking number of named storms impacting the entire coastline from eastern Texas to western Florida.
“For regions and perils covered by catastrophe models, the protection gap represents not only potential business growth opportunities for the insurance industry to offer essential protection to vulnerable home- and business-owners, but a responsibility to act,” said Bill Churney, president at AIR Worldwide. “Understanding the protection gap can also help governments assess the risks to their citizens and critical infrastructure, and develop risk-informed emergency management, hazard mitigation, and public risk financing strategies to enhance global resilience and reduce the ultimate costs from catastrophic events.”
The 2020 report derives its loss metrics from the most current global property and crop models from AIR, including new models and updates released during 2020 as well as databases of property values for more than 110 countries. The report excludes losses from AIR’s pandemic, cyber, and casualty models.
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