In the first quarter of 2024, insured losses caused by natural catastrophes amounted to $17 billion, slightly above the average of $16 billion, as reported by Aon PLC on Monday. Despite this, losses decreased by 43.3% from the $30 billion experienced in the first quarter of 2023.
Despite a slight increase in total insured losses compared to the previous year, Aon noted that individual event loss estimates often change even months after the occurrence. For example, the total loss from the Noto event in Japan is still preliminary and may surpass $1 billion as more information becomes available.
Severe convective storms were responsible for over half of the total first-quarter losses at $8.7 billion, with winter weather and flooding following at $3.5 billion and $1.5 billion, respectively. The majority of severe convective storm and winter weather events occurred in the United States and accounted for most of the global insured losses during the quarter. Notably, severe convective storms in January and March each exceeded $1 billion in losses.
Aon warned that loss estimates may increase as additional losses emerge from natural catastrophe events, a phenomenon known as “loss creep.” This refers to the tendency for initial estimates to be adjusted based on new information that becomes available after an event has occurred. As such, it’s important for insurance companies to be prepared for potential changes in loss estimates and adjust their risk management strategies accordingly.
Overall, while insured losses caused by natural catastrophes increased slightly compared to the previous year, Aon emphasized that individual event loss estimates can change significantly over time due to new information becoming available after an event has occurred. Insurance companies should keep this in mind when developing their risk management strategies and budgeting for potential future losses caused by natural disasters.
