Global insured losses from natural catastrophes in Q1 2024 were minimally estimated at $20 billion, heavily driven by severe convective storm (SCS) activity in the United States, according to the Natural Catastrophe & Climate Report: Q1 2024 by global reinsurance broker Gallagher Re.
The analysis reported economic losses from all natural perils at an estimated $43 billion – 17% lower than the most recent 10-year Q1 average. Estimated insured losses in Q1 2024 were 10% higher than the decadal average of $18 billion.
When looking solely at weather and climate-related disaster costs, which excludes losses from earthquakes, volcanos and other non-atmospheric-driven events, insured losses in Q1 were estimated at $17 billion – equal to the decadal average. Economic costs reached an estimated $31 billion, lower than the decadal average of $43 billion.
Q1 was defined by major events such as several billion-dollar SCS outbreaks in the US, a USGS-registered magnitude-7.5 earthquake in Japan and an active European windstorm season. However, the overall financial cost from natural catastrophes to start 2024 were manageable for the private insurance market and public insurance entities, the report said.
US SCS is costliest Q1 peril
Following a record year in 2023 for insured losses from US SCS activity, this non-peak – or secondary peril – continued to lead the way as the costliest peril to start 2024. In fact, the first quarter marked the second-most expensive Q1 for SCS at an estimated $11 billion in global insured losses -- behind the $15 billion in Q1 2023. The US accounted for more than $10 billion of the Q1 2024 total and at least three individual billion-dollar insured loss SCS events alone, including the quarter’s costliest insured event, which was primarily driven by a modern era record number of large hail reports (2.0+ inches in diameter).
What’s more, the first three months of the year saw non-peak perils (e.g. SCS, flooding, winter weather, wildfire, and drought) account for more than double the economic costs for peak perils such as tropical cyclone, earthquake and European windstorm. Non-peak perils surpassing peak perils in Q1 economic losses is a continuing trend that has extended back at least a decade. (See Figure 1, Page 5 in the report).
Looking ahead
Close attention will be paid to the expected rapid shift from El Niño to La Niña conditions which have already resulted in early projections for a potentially hyperactive Atlantic hurricane season. According to the report, since 1950 there have been 28 La Niña episodes which had a total of 50 US mainland hurricane landfalls, compared to 20 El Niño episodes during the same time period with a total of 15 US mainland hurricane landfalls. (See Figure 5, page 14).
Gallagher Re’s Chief Science Officer Steve Bowen said: “While 2024 has resulted in a manageable start for natural catastrophe losses, the spring and summer months across the Northern Hemisphere often bring more volatile weather or climate-related activity. There is already heightened awareness for the looming Atlantic hurricane season and the current atmospheric/oceanic conditions that may spawn above average storm activity. While not every La Niña behaves the same way, we have consistently seen the influence of climate change on the various phases of ENSO that fuels more extreme weather behavior. Preparation, investment and adaptation remains imperative in the face of increasing risk.”
Download the full report here.
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