Global catastrophes are expected to cause about £77bn in insured losses on an annual average basis, according to calculation from AIR Worldwide.

The extreme event modelling firm estimates that the five percent aggregate exceedance probability insured loss (or the 20-year return period loss) is approximately £148bn, and the one percent aggregate exceedance probability insured loss (or the 100-year return period loss) is about £233bn.

These are among the finding of the firm’s 2021 Global Modeled Catastrophe Losses report, detailing key global financial loss metrics based on AIR’s latest suite of models that reflect the near-present climate risk.

“While there has been justifiable concern about extreme event losses over the last few years, outside of 2017, actual global insured losses have been below the modelled long-term average,” said Bill Churney, president of AIR Worldwide. “Our report shows that the global insurance industry should currently expect a long-run annual average loss of US$$106bn [£77bn]. This notably exceeds the actual average loss of the past decade of approximately US$$75bn [£55bn] and is a stark reminder that we have been fortunate to not have had a major tropical cyclone or earthquake event in a highly populated region. However, such events can and will occur under the climatic conditions of today and society must continue to focus on ensuring resilience to the risks of today while also looking forward to how risk may change in the decades ahead.”

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