First-Quarter Catastrophe Losses Exceed Average Losses for Period

Catastrophes were responsible for at least $83 billion in economic losses worldwide during the first quarter of this year, well above both the 21st-century first-quarter average of $61 billion and the $54 billion in losses during the same period last year, according to Aon.

First-quarter catastrophe losses were driven by California wildfires, Aon said in its Q1 Global Catastrophe Recap, as well as several other billion-dollar events including multiple severe convective storm (SCS) outbreaks across the United States in February and March and earthquakes in Myanmar and China.

The first quarter's insured catastrophe losses were expected to reach at least $53 billion, Aon said. Those insured losses are significantly higher than the 21st-century first-quarter average of $17 billion, Aon said, and are the second-highest first-quarter total on record after the first quarter of 2011.

Those sizable insured losses resulted primarily from California wildfires, which were responsible for approximately $37.5 billion in insured losses, 71 percent of the total, the Aon report said.

The insurance protection gap associated with first-quarter catastrophe losses was provisionally estimated at 36 percent, Aon said. That would be by far the lowest first-quarter protection gap on record, according to the report, and would be the lowest first-quarter value since a 47 percent gap during the first quarter of 1990.

Aon attributed the lower-than-usual first-quarter protection gap to the sizable percentage of first-quarter insured losses occurring in the United States, where the insurance penetration rate is relatively high.

Natural catastrophes were responsible for more than 6,000 deaths during this year's first quarter, the Aon report said. That figure is considerably higher than last year's first-quarter death toll of 1,800. The quarter's death toll is expected to climb further, Aon said, due to the vast majority of deaths—88 percent—resulting from the recent earthquake in Myanmar.

Excluding the Myanmar earthquake, all other first-quarter catastrophes resulted in about 700 fatalities, which would be one of the lowest first-quarter losses of life on record, according to Aon.