Our H1 2024 Natural Catastrophe review highlighted how in the first half of the year global natural catastrophes caused extensive damage, with the U.S. experiencing above-average tornadoes, hailstorms, and straight-line wind events, totalling over $30 billion in insurance claims. Severe flooding affected Brazil, East Africa, Australia, and Germany, while Japan and Taiwan were hit by significant earthquakes. This follows on from a “new normal” in 2023, another year in which insurers saw over $100 billion in claims. A shift is also emerging in the factors driving these losses. In 2023, more than 30 events collectively contributed to over $100 billion in losses, with the bulk of the total coming from smaller to mid-sized events. Notably, the largest event— the devastating Turkey/Syria earthquake—accounted for just $6 billion in insured damages. In the first half of 2024 there were nearly 20 individual billion-dollar economic loss events, including a fast start to the US referencing as detailed in our work with Columbia University. Hurricane Beryl saw a record-breaking early start to the Atlantic hurricane season and whilst subsequent weeks have been relatively inactive, our work with James Done at NCAR details why the ceiling on the Atlantic hurricane season numbers was set so high.
AI is already significantly changing the insurance industry and in this newsletter we feature two case studies from work done with WRN partners at Loughborough University. Advanced AI models can analyze diverse datasets—such as property details, historical claims, and environmental data—to provide precise risk evaluations and customized insurance pricing. It can use satellite imagery, drones, and smart sensors to assess property conditions, identifying potential risks like structural weaknesses or fire hazards. This allows insurers and risk engineers to proactively ensure properties meet local building codes and safety standards, minimizing potential claims. By automating risk assessment, AI reduces human error and speeds up underwriting, leading to more accurate policies and faster policy issuance. Additionally, AI-driven tools can continuously monitor properties and alert insurers and clients to any changes that might affect compliance or risk levels.
2024 was already marked as a historic year with record numbers of people heading to the polls across the globe. Geopolitical volatility was one of the biggest risks identified at the start of the year by a WTW report that set out potential consequences the ‘year of elections’ could bring alongside continuing US-China tensions and ongoing war in Europe. Political violence risk in Europe and North America has been characterized by assassination attempts and civil unrest. This has real impact on business and trade. In particular, the semi-conductor industry remains at the sharp end of much of this risk, navigating increased complexity in production and global supply chains.
As always, thank you for reading and please do get in touch with any questions.
Stuart Calam
WTW Research Network
01
We are delighted to invite you to register for the WTW Outsmarting Uncertainty programme 2024, featuring talks on how to manage physical risks, the evolution of natural catastrophe models and delivering value through a strategic transition to net zero.
02
This edition presents insights and lessons learned from major natural disasters in the first half of 2024, explores key themes of the year so far, and offers an outlook for the second half of 2024.
03
A second consecutive year of record heat in the North Atlantic Ocean, along with developing La Niña conditions, is expected to boost hurricane activity in the basin. Will they again stay out to sea?
04
Severe storms have set a fast pace for the first half of 2024. Will exposure growth and climate change combine to produce another year of high losses from convective storms?
05
Transforming risk assessments with AI: Automate, enhance, and streamline documentation through advanced language and vision models. Discover the future that precise and efficient risk evaluation holds.
06
Ensuring buildings adhere to national building codes is often a labor-intensive, error-prone, and time-consuming process. A recent study has addressed these challenges by using Artificial Intelligence (AI).
07
How the 2024 Texas Panhandle wildfires highlight urgent lessons for managing climate change, population decline, and aging infrastructure.
08
Catastrophic flooding in Brazil in April and May was a stark reminder of the compound effect of El Niño and climate change. Unprecedented rainfall led to devastating flooding across Rio Grande do Sul.
09
The semiconductor industry is truly a global ecosystem. Each company within the industry specializes in one or more stages of the chip production process, forming a supply chain that spans worldwide and results in more resilience and efficiency.
10
In this episode of Geopolcast we focus on political risks in the oil and gas sector and the undeniable struggles this crucial industry is facing.
