MILLIRE_2019_Annual Report

Milli Re Annual Report 2019 54 After the previous two years, which were highly active in terms of the natural catastrophe activity, even though the first half of the year passed quite calmly, as a result of the severe weather events, especially the tropical cyclones and typhoons recorded in the second half of the year; total economic losses from natural catastrophes remaining below the previous year’s figure of USD 160 billion stood at USD 150 billion in 2019. Decreasing by 35% on an annual basis, insured losses declined to USD 52 billion from USD 80 billion. This amount was far below the 10-year average of USD 65 billion, mainly owing to the fact that many developing countries, where the insurance penetration is very low, have been highly affected by this year’s natural disasters, predominantly by flood, which is not as widely insured as hurricane. Accounting for 51% of the total global economic losses and 65% of the insured losses; the catastrophes affecting North and Central America including the Caribbean gave rise to majority of the losses last year; however in 2019, Asia with 49% share in the total economic loss amount stood out as the region that is most heavily affected by the natural disasters. Looking at the insured loss amounts, even though the trend ongoing since 2011 kept prevailing and North America losses dominated the statistics with 55% share in the global insured loss amount, Typhoon Hagibis and Faxai, extensively affecting Japan, caused a total of USD 17 billion insured losses and were recorded as the two costliest natural catastrophes for the insurance industry in 2019. As a result, Asia’s share in the total global insured losses showed substantial increase by rising to 35% from 24%. After severe tropical cyclones like Harvey, Irma, Maria and Michael causing heavy damages and leaving their mark the region for the previous two years, in 2019 the Atlantic hurricane season was calm, with Hurricane Dorian being the only major hurricane affecting North America this year. Originating as a tropical wave over Mid- Atlantic on August 24 th and its maximum sustained wind speed reaching 250 km/h by September 1 st , Hurricane Dorian quickly intensified into a Category 5 storm and severely affected the Bahamas, especially the Grand Bahama and Abaco islands; as well as Florida, North Carolina, South Carolina, Virginia, Georgia states of the US and Canada. In Bahamas, where Dorian caused the most severe damage; the devastating storm brought along sea surges, tornadoes, torrential rainfalls and floods destroying many homes and lives. While the losses were largely recorded in the Bahamas and the Caribbean; Hurricane Dorian is estimated to have caused a total economic loss of USD 5.6 billion, of which USD 4 billion is expected to be recoverable from insurance industry. GLOBAL REINSURANCE MARKET AND MİLLİ RE Total economic losses originating from natural catastrophes stood at USD 150 billion in 2019.