The frequency of severe weather events is increasing, and, with almost 50% of economic losses sustained by natural disasters unprotected last year in the US, the country’s recent hurricanes have bought the insurance protection gap under the spotlight.
Estimates by AIR Worldwide suggest the insured losses incurred by Hurricane Irma could be as high as $32bn-$50bn, while the exposure value along the gulf coast up to Tampa is estimated at $1trn. The industry is still assessing the final bill of Hurricane Harvey, which could be $70bn, according to the chief executive of Hiscox, compared with the $82bn of insured losses Hurricane Katrina inflicted in 2005.
“Hurricane Harvey had devastating consequences, and many losses are uninsured, leaving the government, and therefore taxpayers, to pick up most of the bill,” Eric Andersen, CEO at reinsurance firm Aon Benfield, said. “The frequency of severe weather-related losses is increasing, and there needs to be a significant step-up in the efforts made to address the protection gap evident globally.”
Irma
Strength: Category 5 storm, winds up to 160mph Death toll: US: to date 36, Caribbean: to date 38, but expected to rise.
Destruction: Quarter of houses in Florida Keys said to be destroyed, with half the population without power. Caribbean islands reporting up to 90% of structures damaged, with thousands left homeless.
Harvey
Strength: Category 4 storm, winds up to 155mph Death toll: 82 Destruction: Approximately 94,000 homes damaged, around one million cars wrecked, and an estimated 450,000 people in need of emergency assistance.
