Natural Disaster Losses Highest Since 2017

Natural disasters

Natural disasters are extreme, sudden catastrophes caused by natural processes such as weather. Different types of natural disasters include floods, hurricanes, tornadoes, earthquakes, and wildfires. There are many consequences that occur as a result of natural disasters, which include death, economic and infrastructural damage, and public health issues. Natural disasters have a greater affect on low income countries than the richer countries in the world. These countries do not have enough money to rebuild after a natural disaster, and therefore rely on foreign aid.

Overall Numbers

So far in 2020, experts estimate that natural disasters have caused economic losses around 75 billion U.S. dollars. Of that, around 30 billion are insured losses.

As of October 7, there have been 16 weather/climate disaster events affecting the United States with losses exceeding $1 billion each. These events included 1 drought event, 11 severe storm events, 3 tropical cyclone events, and 1 wildfire event. Overall, these events resulted in the deaths of 188 people and had significant economic effects on the areas impacted. The last 5 years have been especially hard on areas prone to disaster. Natural disasters occurred at a rate of about 6.6 events per year (CPI-adjusted) between 1980 and 2019. However, in the last 5 years alone, that rate has increased to 13.8.

In only the first 9 months of 2020, we have tied the annual record of 16 events that was set in 2011 and repeated in 2017. 2020 is the sixth consecutive year (2015-2020) in which 10 or more billion-dollar weather and climate disaster events have impacted the United States. Over the last 41 years (1980-2020), the years with 10 or more separate billion-dollar disaster events include 1998, 2008, 2011-2012, and 2015-2020.

Causes for Losses

Severe storms, such as thunderstorms with tornadoes, floods and hail, caused insured losses of over $21 billion for the period. This was the highest loss cost since the first half of 2011 when losses from this peril alone totaled roughly $30 billion.

These catastrophe loss estimates are for property damage and do not include COVID-19-related claims. More than 2,000 people lost their lives or went missing in disaster events during the first half of this year. The main driver of losses were secondary perils, with thunderstorms in North America playing a significant role.

Of the $75 billion in total global economic losses in the first half of 2020, natural catastrophes accounted for $72 billion, up from $52 billion in the year-earlier period. The remaining $3 billion of losses were caused by man-made disasters, down from $5 billion for the first half of 2019. This year’s decline was in part due to the COVID-19 pandemic. Global insured losses from natural catastrophes rose to $28 billion in the first half of 2020 from $19 billion the year before, while insured losses from man-made disasters decreased to $3 billion from $4 billion.

Preparing to help

If you have been considering a career change to insurance adjusting, now is a great time to get started. The sooner you begin your training and get licensed, the sooner you can be on the front lines of recovery. 2021 Training is here to prepare you.