In the first quarter, natural disaster insurance claims were estimated to be at least $22 billion, with total economic losses estimated at $77 billion, according to Arthur J. Gallagher & Co.’s reinsurance business unit Gallagher Re said in a report Wednesday.
The economic 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 normal bankruptcy development occurs and new information becomes available, the report said.
Weather or climate-related disasters, not including earthquakes, accounted for $17 billion in insured losses and $31 billion in economic losses. These losses occurred during the costliest first quarter of US hurricane activity, resulting in $10 billion in insured losses and $13 billion in total economic losses. The floods in New Zealand also contributed.
“The high dollar loss costs seen in Q1 2023, including events related to high-profile thunderstorms and floods, have shown significant gaps in insurance coverage in developed and developing economies,” said Steve Bowen, Gallagher’s chief scientific officer, in a statement.
The biggest driver of economic losses was the magnitude-7.8 earthquake that struck Turkey and Syria on February 6, causing direct physical damage of up to $45 billion, according to the World Bank’s first high-level financial assessment. Total insured losses are estimated to be close to $5 billion;” According to the statement, the largest industrial loss for the Turkish market.
The report found that despite the requirement to purchase residential earthquake insurance, only 49% of homeowners in the 11 worst-hit Turkish provinces had active policies from Turkey’s catastrophe insurance pool, Gallagher said.
“The Turkey earthquake sequence was a reminder of the significant risks to life and property from seismic events,” Mr Bowen said.
“As the private and public sectors work together to develop societies that are more resilient and adaptable to current and future climate change risks, it is important to consider all natural hazards in planning discussions, not just weather or climate hazards.”
Last week, Aon Plc reported that insured natural disasters reached $15 billion in the first quarter.