Moody's highlights 'game-changer' events in catastrophe review

Moody’s highlights ‘game-changer’ events in catastrophe review

6 March 2023

Moody’s RMS has described 2022 as “another challenging year for the insurance industry” in its latest natural catastrophe review as losses continued to soar.

Reinsurers have projected insurance losses to pass $US100 billion ($148.02 billion) once again, as the risk modeller flags “game-changing events” in recent years.

“2022 will go down in history as another challenging year for the insurance industry, and another in a stretch of years dating back to 2017 that have brought game-changing events that altered our understanding of natural catastrophe risk,” Moody’s RMS said.

Munich Re estimates global economic costs of $US1.2 trillion ($1.78 trillion) from natural disasters between 2017 to 2021 and close to $US500 billion ($740.09 billion) in insured losses, with another $US120 billion ($177.62 billion) added from last year.

Moody’s RMS says the industry mantra of “it only takes one” was shown to be true in the aftermath of Hurricane Ian, which left devastating impacts in the US and Caribbean in September.

The storm was recorded as the costliest insurance event last year and is expected to be the second most expensive in history. Moody’s RMS estimates the insurance cost to be somewhere between $US53 billion ($78.45 billion) and $74 billion ($109.53 billion).

The risk modeller also highlighted last year’s historic floods in NSW and Queensland, as well as a series of winter storms and hail storms in Europe as other notable events totalling billions in insured losses.

Moody’s RMS says its approach to event responses “continues to evolve” as the severity and frequency of natural disaster events grow.

“Striking a balance between timeliness and accuracy remains critical to ensure that we deliver the most credible analysis to our clients while increasing efficiency and continuing to reduce delivery timelines,” Moody’s RMS said.