2023 Global Modeled Catastrophe Losses
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Verisk's Global Modeled Catastrophe Losses report includes global loss metrics based on Verisk’s latest suite of models and updated industry exposures.
Here are a few key takeaways from this year’s report:
- While the actual average loss over the past five years is approximately USD 100 billion, our modeled losses indicate the global insurance industry should expect to experience far higher levels of insured losses every year – in excess of USD 133 billion.
- This insured loss is only around 1/3 of a more than USD 400 billion estimated total economic loss from global natural peril catastrophes, signaling a notable global protection gap.
- Over the past 5 years, actual insured losses from natural catastrophes have averaged USD 101 billion compared to an average of approximately USD 70 billion over the previous 5-year period.
- Multiple factors contribute to this increase, including:
- A rise in exposure values and replacement costs, represented both by continued construction in high-hazard areas as well as an inflationary environment that continues to drive up repair costs
- The effects of climate change on different atmospheric perils
- Finally, while the modeled average annual loss is higher than our recent experience, the industry should also be prepared for years with even higher losses. As just one example of a full distribution of analytics available from the models, Verisk estimates a 5% probability (i.e., 1 in 20-year chance) of experiencing a loss of more than USD 238 billion.