FRANKFURT, July 18 — Insurers paid out around US$19.5 billion (RM83.5 billion) for natural disaster claims in the first half of 2017, almost 40 per cent less than the year-earlier payout of US$32 billion, reinsurer Munich Re said today.
In addition, some US$21.5 billion of losses were uninsured, down from US$79 billion a year earlier.
Thunderstorms in the United States caused the most damage overall, causing economic losses of US$18.5 billion, of which US$13.5 billion was insured, Munich Re said in a review of industry losses.
“The unusual atmospheric conditions in the USA in the first half of 2017 provided the perfect conditions for powerful supercell thunderstorms, which frequently bring major hailstorms and tornadoes,” Peter Hoeppe, head of Munich Re’s Geo Risks Research, said.
“The number of tornadoes observed in the first quarter of 2017 was twice as high as the average for the last 10 years.”
The single costliest catastrophe was flooding in Peru in February and March, which caused US$3.1 billion in economic losses, but only US$380 million of that was covered by insurance.
Reinsurers act as a financial backstop to insurance companies, paying a chunk of the big claims for storms or earthquakes in exchange for part of the premium.
Lower claims payouts boost insurance industry profit but have a downside for reinsurers, whose insurance company clients often then demand lower prices for reinsurers’ backing.
The review gave no claims figures for Munich Re itself. The reinsurer is due to report second-quarter results on Aug. 9. — Reuters