When compared with the record losses of the previous year from Hurricanes Harvey, Irma and Maria, the indications at the start of 2018 were that it would be a more moderate year. However, the second half of the year saw an accumulation of billion-dollar losses from floods, tropical cyclones in the US and Japan, wildfires and earthquakes. The overall economic impact was $160 billion, of which $80 billion was insured.
A comparison with the last 30 years shows that 2018 was above the inflation-adjusted overall loss average of $140 billion. The figure for insured losses – $80 billion – was significantly higher than the 30-year average of $41 billion. 2018 therefore ranks among the ten costliest disaster years in terms of overall losses, and was the fourth-costliest year since 1980 for the insurance industry.
In particular, Hurricanes Michael and Florence in the Atlantic, and Typhoons Jebi, Mangkhut and Trami in Asia, all left their mark. Overall losses from tropical cyclones in 2018 came to roughly $57 billion, of which $29 billion was insured. There was also an extremely high impact from wildfires in California that produced overall losses of $24 billion and insured losses of $18 billion. Over the course of the year, 29 events each resulted in an overall loss of $1 billion or more.
Roughly 50% of global macroeconomic losses from natural catastrophes in 2018 were insured, a significantly higher percentage than the long-term average of 28%. North America accounted for 68% of insured losses, Asia for 23% and Europe for 8%. The remaining losses of less than 1% were divided between South America, Africa, Australia and Oceania.
Payouts by the insurance industry helped to boost catastrophe resilience, in other words the ability after a disaster to return to normality as quickly as possible. However, industrialized countries still account for the vast majority of insurance payouts following natural catastrophes. There has been a steadily growing willingness in these countries to take out cover against natural hazards since the 1980s. The situation with insurance protection in emerging and developing countries is quite different, despite the fact that, for financially weak and low-income countries, improving risk management and resilience-building systems is an important way of mitigating the impact of humanitarian disasters and promoting sustainable economic growth.
Regrettably, 10,400 people around the world lost their lives in natural disasters this year. This groups 2018 with the years 2016, 2014, 2000, and three other years in the 1980s, in which the victim toll was around 10,000. Geophysical events accounted for 34% of all fatalities. This is much lower than the 49% figure over the period 1980–2017. Storm events claimed 24% of the victims, roughly the same as the 26% average since 1980. However, the picture was very different for the number of lives lost in flood events; this year’s figure of 35% was substantially higher than the 14% average. The reason for this was large-scale flood events in Asia and Africa.
Earthquakes with and without tsunamis in August, September and December in Indonesia claimed the lives of over 3,000 people. These proved to be the events with the highest number of fatalities in 2018, followed by floods in India, Japan and Nigeria. Worldwide, 273 people were killed in wildfires over the course of the year. This is the second-highest number in the time series since 1980 and is only surpassed by the extensive fires in Indonesia in 1997, which claimed the lives of 375 people. Heading the list in 2018 were fires in Greece with 100 fatalities and the US with 108.