Thanks to climate change, so-called “secondary perils” are a least as threatening to global property and casualty insurers as primary perils such as earthquakes or hurricanes, according to the latest sigma study published by Swiss Re.
Secondary perils are typically more frequent than primary perils and are not modeled; they can be the spin-off effect of primary perils.
Examples of secondary perils include river floods, torrential rainfall, landslides, thunderstorms, winter storms (excluding Europe), snow and ice storms, drought, and wildfires.
Insured losses due to natural and human-made catastrophes cost the global P&C industry US$56 billion in 2019, Swiss Re estimated in its most recent sigma report.
Hurricane Dorian, which hit the Bahamas and North Carolina in the fall before sweeping through Atlantic Canada, accounted for US$4.5 billion of the global insured damage estimates.