Gallagher Re’s Mid-Year Natural Catastrophe and Climate Report Highlights 2024’s Severe Convective Storm Impact

The first half of 2024 has been marked by significant global natural catastrophes, resulting in $61 billion in insured losses, well above the decadal average. A majority of these losses, approximately 61%, were due to severe convective storms in the United States, totaling $37 billion. Over the past 18 months, US storm-related loss costs have surpassed $100 billion, making 2023-2024 the most expensive back-to-back years for this peril on record.

The Atlantic hurricane season is a key focus as we move into the second half of 2024. Colorado State University, in collaboration with the Gallagher Research Centre, has forecast a potentially hyperactive season. This prediction comes on the heels of Hurricane Beryl’s unprecedented early-season intensity. Beryl set a record as the strongest hurricane ever recorded before August 1st, reaching Category 5 with winds of 165 mph on July 2nd. The combination of record warmth in the Atlantic Ocean and the transition from El Niño to La Niña conditions are major driving factors in this forecast, suggesting that the insurance industry must brace for a challenging period ahead.

Globally, economic losses from natural disasters in the first six months of 2024 reached $128 billion, with weather and climate-related events accounting for $113 billion of that total. This is the sixth consecutive year with weather/climate-related economic losses exceeding $100 billion. The high frequency of severe weather events, particularly in the US, has contributed significantly to these losses. Notably, the warmest first half of the year on record, dating back to 1850, has been observed globally, indicating a trend of increasing severity and unpredictability in natural disasters due to climate change.

As we enter the second half of 2024, the focus remains on the potential impact of the Atlantic hurricane season. The insurance industry is preparing for possible significant claims as the season progresses. The Gallagher Re report emphasizes the importance of continuous monitoring and readiness to mitigate the financial impacts of these natural catastrophes.

Additionally, regions around the world have experienced various forms of natural disasters. For instance, Central Europe and southern Germany saw significant flooding in late May and early June, leading to economic and insured losses exceeding $2 billion. In the Middle East, the Arabian Gulf flash floods in mid-April became the region’s costliest weather-related event on record, with losses surpassing $2.8 billion. In Brazil, the Rio Grande do Sul floods in late April and early May resulted in over $8 billion in losses.

The Gallagher Re report underlines the critical need for the insurance industry to adapt and respond to the evolving nature of natural catastrophes. The data underscores the importance of robust risk management strategies and the necessity for insurers to stay informed and prepared for the increasing frequency and severity of these events.