Natural catastrophe insured losses for the first quarter were estimated at at least $22 billion, with total economic losses pegged at $77 billion, according to a report Wednesday from Gallagher Re, the reinsurance arm of Arthur J. Gallagher & Co.
The financial loss figure represents the highest first-quarter total since 2011, according to a statement released with the report. These estimates are subject to change as default loss trends occur and new data is obtained, the report said.
Weather or climate-related disasters, excluding earthquakes, caused $17 billion in insured damages and $31 billion in economic losses. These losses were driven by the costliest first quarter ever for US severe convective storm activity, which caused $10 billion in insured losses and $13 billion in total economic losses. Flood events in New Zealand also contributed.
“The high dollar loss costs observed in the first quarter of 2023, including those from notable thunderstorm and flood-related events, were characterized by notable gaps in insurance coverage across both developed and emerging economic territories,” said Gallagher Re chief science officer Steve Bowen. statement.
The biggest cause of economic losses was the 7.8-magnitude earthquake that struck Turkey and Syria on February 6, causing direct physical damage likely to approach $45 billion according to a first financial assessment by the World Bank, according to the report. Total insured losses are estimated to approach $5 billion,” the biggest industrial loss for Turkey’s market ever, according to the statement.
The report said that despite a requirement to buy earthquake insurance for homes, only 49% of homeowners in the 11 hardest-hit Turkish provinces had active policies from the Turkish catastrophe insurance pool, Gallagher Re said.
“The earthquake sequence in Turkey was a stark reminder of the significant vulnerabilities that exist to life and property from seismic events,” Bowen said.
“As the private and public sectors work together to develop a more resilient and adaptive society to current and future climate change risks, it is imperative that all types of natural hazards, and not just weather or climate hazards, are considered in planning discussions.”
Last week, Aon PLC reported that losses from insured natural catastrophes had reached $15 billion for the first quarter.