Allianz Risk Barometer 2021 -
Natural catastrophes

Devastating wildfires in California and Australia and the record-breaking number of tropical storms in the Atlantic Ocean were among the natural catastrophes to dominate the headlines in 2020. No previous Atlantic hurricane season on record has produced as many named storms (30) of which 13 developed into hurricanes. Meanwhile, Australia suffered its worst-ever wildfire season, while five of California’s six largest fires occurred in 2020, including its first “gigafire”, the August Complex Fire which burned more than one million acres.

However, 2020 was also the third consecutive year without a single major nat cat event causing significant (economic/ insured) damages, such as Hurricane Harvey in 2017. Despite the record-breaking hurricane season, most US landfalls did not hit densely populated areas in 2020, resulting in relatively low insured losses of $20bn+.

That said, aggregated losses from multiple small- to medium-sized events still led to widespread devastation and considerable overall insured losses. Natural catastrophes caused around $80bn of global insured losses in 2020, up more than 40% from 2019 [1], mostly from secondary peril events such as severe convective storms (thunderstorms with tornadoes, floods and hail) and wildfires, primarily in North America.

“The frequency of major loss-causing non-weather-related nat cat events, such as earthquakes or tsunamis, has decreased in recent years,” says Carina Pfeuffer, Catastrophe Risk Analyst at AGCS. “Consequently, the negative perception of these cat risks, as indicated by the level of importance in the Allianz Risk Barometer, has also declined. Simultaneously, in 2020, unlike any year before, with Covid-19 decelerating business around the globe, other risks such as ‘pandemic outbreak’ and ‘market developments’ have become more visible.”

Nevertheless, nat cat risks remain in the top three business risks in many regions, particularly across Asia – including South Korea, Hong Kong and Japan – which is frequently affected by meteorological, geophysical, climatological and hydrological events. Further secondary perils, such as severe floods in provinces along the Yangtze River in China from May, resulted in one of the biggest insured losses in Asia during 2020 ($2bn) [2].