Insured average annual losses from catastrophes globally this year have risen to nearly $US100 billion ($137 billion) from $US91.8 billion ($125.9 billion) last year, according to AIR Worldwide.

The catastrophe modeller says the figures have been rising since 2012 when it released its first global modelled catastrophe losses report.

In 2012 the losses were about $US59.3 billion ($81.3 billion) and increased to $US67.4 billion ($92.4 billion) the following year. In 2016 it reached $US80 billion ($109.7 billion) but fell slightly to $US78.7 billion ($107.9 billion) in 2017 before rising to $US85.7 billion ($117.6 billion) in 2018.

AIRWorldwide says the rise was expected. “The rise reflects both increases in the numbers and values of insured properties in areas of high hazard and the inclusion of regions and perils for which new models are now available.

“Changes in the hazard component of one model resulted in significant reductions in the insured and insurable losses for AIR’s Australia earthquake model, impacting losses in the Oceania region.”

In its 2020 report on catastrophe losses, AIR says insured losses make up about a quarter of economic losses on average when trended to 2018 dollars.

This roughly translates to more than $US447 billion ($613.1 billion) based on its estimates of insured average annual losses.

In Australia and the broader Oceania region about 37% of economic loss from natural disasters is insured, second only to North America’s 38%. In Asia only 9% of economic loss is insured, reflecting the weak take-up of protection cover in many less-developed economies.

“The sizable difference between insured and economic losses – the protection gap – represents the cost of catastrophes to society, much of which is ultimately borne by governments,” the report says.

“Increasing insurance penetration can ease much of the burden, while providing profitable growth opportunities for the insurance industry.”

Click here for the catastrophe report.